Analyzing the Relationship between Interest Rate and External Reserves in Nigeria: a Cointegration Approach
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Date
2023
Authors
Njoroge, Machupa
Journal Title
Journal ISSN
Volume Title
Publisher
The USA Journals
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.
Description
Article
Keywords
Nigeria, interest rate, external reserves, cointegration analysis, economic stability, oil industry
Citation
Machupa Njoroge, . (2023). ANALYZING THE RELATIONSHIP BETWEEN INTEREST RATE AND EXTERNAL RESERVES IN NIGERIA: A COINTEGRATION APPROACH. The American Journal of Interdisciplinary Innovations and Research, 5(05), 01–03. https://doi.org/10.37547/tajiir/Volume05Issue05-01