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ANALYZING THE RELATIONSHIP BETWEEN INTEREST RATE AND EXTERNAL RESERVES IN NIGERIA: A COINTEGRATION APPROACH

Machupa Njoroge
Accounting And Finance Department School Of Business, Kenyatta University, Nairobi Kenya
DOI Crossref DOI 10.37547/tajiir/Volume05Issue05-01
tajiir 2023
VOL. 5 / NO. 05 MAY
FULL TEXT PP. 01-03
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VOLUME 5
ISSUE 05
YEAR 2023
PAGES 01-03
RESEARCH OVERVIEW

Abstract

Nigeria's economy is heavily reliant on the oil industry, making external reserves and interest rates crucial indicators of economic stability and development. This paper examines the long-term relationship between interest rates and external reserves in Nigeria using cointegration analysis. The study finds a significant long-term relationship between the two variables and suggests that external reserves have a causal relationship with interest rates, indicating that external reserves are a crucial determinant of interest rates in Nigeria. The findings have important implications for policymakers in Nigeria, highlighting the importance of maintaining a stable external reserve to ensure economic stability and growth.

RESEARCH TOPICS

Keywords

Nigeria interest rate , external reserves

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References

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