Tag Archives: Minimum rediscount rate

Interest Rate Dynamics and Its Impact on the Performance of the Manufacturing Sub-Sector in Nigeria (Published)

The major focus of the research is to empirically investigate the impact of interest rate dynamics on performance of manufacturing- sub sector in Nigeria.  The research covers the period between 1980 and 2019.  This period is important since it includes the pre-structural adjustment programme (SAP) era where interest rate was not liberalized and the structural adjustment programme period where interest rate is liberalized.  The cointegration technique with its implied error correction mechanism was used for the study.  The result shows that the high interest rate in Nigeria has hindered the performance of the manufacturing sub sector.  The GARCH and ARCH results indicates that interest rate dynamics has influenced the performance of the manufacturing sub- sector.  The result also confirms a long run relationship among the variables.  It was therefore recommended amongst others, that there should be a drastic reduction in the interest rate coupled with the adoption of liberalized interest rate regime with some caution; this will increase the performance of the manufacturing sub- sector in Nigeria.

Keywords: Minimum rediscount rate, Monetary Policy Rate., Treasury Bills, and inflationary spiral., manufacturing sub-sector

Macroeconomic Analysis of the Relationship between Monetary Policy Instruments and Inflation in Nigeria (Published)

This study examined the role of monetary policy instruments in controlling inflation in Nigeria. The study adopted interest rate, minimum rediscount rate, liquidity ratio, and cash reserve ratio as proxy for monetary policy instruments and the independent variables. These were regressed against inflation rate, the dependent variable. Secondary time series panel data for the period covering 1982 to 2011, were collected from the Central Bank of Nigeria (CBN) Statistical Bulletin in 2011. The study employed multiple regression technique based on E-views 7 computer software to analyze data obtained on the study variables. Four hypotheses were tested and the null hypotheses were accepted based on the regression results. The study found that interest rate, minimum rediscount rate, liquidity ration and cash reserve ratio had no significant influence on inflation. The study recommended that Nigeria shift from being a consumption driven (import) economy to production based (export) economy for the impacts of these policies to achieve desired results.

Keywords: Cash Reserve Ratio, Inflation, Liquidity Ratio, Minimum rediscount rate, Monetary Policy