Deregulation of Interest: Implication for National Development

Abstract

This paper investigates the deregulation of interest and its implication to national development in Nigeria. Utilizing annual time series data from 1970 to 2018, the study applied augmented dickey fuller unit root test. Overall, our results show that money supply have very strong influence on deregulation in the Nigerian economy. The result equally showed that interest rate, exchange rate, money supply and availability of credit are significant first difference. Thus, the paper submits that deregulation of interest rate has positive impact on exchange rate in Nigeria and recommends among others that efforts should be geared towards maintaining deregulation of interest rate, measure to enhance exchange rate and encourage savings should be maintained with a view to removing all impediments to free flow of businesses in the country.

Keywords: Deregulation, Interest rate, economic development, exchange rate

DOI: 10.7176/JESD/10-12-01

Publication date:June 30^th 2019