International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Effect of Interest Rate Fluctuation on the Economic Growth of Nigeria, 1970-2010

The main thrust of this study was to investigate the effect of interest rate fluctuation on the economic growth of Nigeria. Two research hypotheses were formulated to investigate the relationship between interest rate and economic growth and the difference in economic growth before and after interest rate deregulation regime in Nigeria. Ex-post facto research design was adopted for this study. Data for the study were obtained from the Central Bank of Nigeria statistical bulletin. Data collected were analyzed and tested using the ordinary least square multiple regression analytical technique. The result of the findings revealed that: there existed an inverse relationship between interest rate and economic growth in Nigeria, meaning that increase in interest rate will decrease GDP of the country, thus retarding growth of the real sector. It was recommended that a strong monetary policy for Nigeria should be evolved that would enhance lending to the real sector economy for productive economic activities.

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