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Adewunmi kamal Adekunle, Volume 4 Issue 2, December 2023 Pages 98-107, Published: 2023-12-26
This study investigated the impact of interest rate deregulation on performance of deposit money banks in Nigeria, covering the period of 32years (1990–2021). Data on national savings, deposit rate, minimum lending rate and monetary policy rate were gathered form Central Bank of Nigeria Statistical Bulletin 2021 Edition. Data were analyzed using the Ordinary Least Square and Augmented Dickey-Fuller (ADF) to capture unit root test in the model. The study revealed that minimum lending rate has impact on total bank deposit of Deposit Money Bank in Nigeria and also, monetary policy rate has positive significant impact on total bank deposit of Deposit Money Bank in Nigeria. National Savings was found to have impact on total bank deposit of Deposit Money Bank in Nigeria. Lastly, deposit rate was found to have significant impact on total bank deposit of Deposit Money Bank in Nigeria. The study therefore concluded that interest rate deregulation has impact on the performance of deposit money banks in Nigeria. The study recommended that bank should increase the interest rate on savings so as to encourage people to save more and spread their investment rather than keeping money under their pillows. Also, Central Bank of Nigeria (CBN) should formulate and use policy instruments that will maintain inflation at a reasonably low level so that it will not erode the real value of stock gains.
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