Interest Rate Pass-Through to Macroeconomic Variables: The Nigerian Experience

Ogundipe, Adeyemi A.; Alege, Philip O.

doi:10.5539/ijef.v5n1017

Cited by 4 publications

(4 citation statements)

References 9 publications

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“…After the test for the order of integration, the next step is to test for co-integration. This test is used to check if long run relationship exists among the variables in the model (Ogundipe & Alege, 2013). This will be carried out using the Johansen technique.…”

Section: Co-integration Testmentioning

confidence: 99%

Monetary Policy and Inflation Control: The Case of Nigeria

Ezeanyeji

Ogugua

Imoagwu

et al. 2021

EJMMS

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Inflation is a major problem facing Nigeria as a country today. The Central Bank of Nigeria (CBN), however, has made efforts to fight it using different policy measures, of which monetary policy is one of them. Thus, this study focuses on the impact of monetary policy on inflation control in Nigeria. The study is based on time series data from 1980 to 2019. The Augmented Dickey Fuller test, Johansen’s co-integration test, the Error Correction model (ECM) estimation was employed in the analysis. The variables include – exchange rate, inflation rate, money supply (% GDP), Treasury bill rate and monetary policy rate. The research findings showed that monetary policy has no significant impact on inflation control in Nigeria both in the short – run and long – run. Money supply has negative and insignificant impact on inflation control in Nigeria both in the short – run and long – run. Again, exchange rate has negative and insignificant effect on inflation control in Nigeria both in the short – run and long – run. The Treasury bill rate has negative but significant effect on inflation control in Nigeria in the short – run, while in the long – run it has positive but insignificant effect on inflation control in Nigeria. The study, therefore, recommends that, Government should provide monetary policies that will preferred efficient provider of favourable environment in terms of the implementation of the appropriate monetary policy rate, exchange rate etc in order to attract both domestic and foreign investment which will create employment opportunities for the Nigerian populace and in turn lead to the expansion of the industries in the country. JEL: E42; E52; E31

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Section: Co-integration Testmentioning

confidence: 99%

Monetary Policy and Inflation Control: The Case of Nigeria

Ezeanyeji

Ogugua

Imoagwu

et al. 2021

EJMMS

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show abstract

“…The finding implied that economic developments in Nigeria. Using a fractional cointegration analysis over the period of 1970-2011 [21] investigated the relationship between environmental quality-carbon emissions and economic growth in Nigeria. The study found no significant evidence to support the EKC in Nigeria.…”

Section: Literature Reviewmentioning

confidence: 99%

Environmental Quality and Economic Development: is there a Kuznets Curve for Air Pollution in Nigeria?

Adelegan¹,

Otu²

2020

SARJHSS

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This paper investigated the validity of Environmental Kuznets Curve (EKC) hypothesis in Nigeria using the Autoregressive Distributed Lag model (ARDL) estimated with the Ordinary Least Square (OLS) technique. The study used annual secondary data obtained from the World Bank indicators and the Central Bank of Nigeria for the period under review (1980-2018). Findings from the study support the validity of the EKC hypothesis for CO 2 emissions. The study therefore recommended a harmonious environmental and economic policy mix that would engender greater income but keeping the protection of the environment a priority.

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“…Therefore, in order to lessen their impact on future cash flows and profitability, commercial banks must be aware of these risks. An interest rate is the difference between how much money you borrow now and how much money you repay at a later date and it is affected by the macroeconomic environment (Ogundipe & Alege, 2018).…”

Section: Introductionmentioning

confidence: 99%

Macroeconomic Dynamics and Profitability of Insurance Firms Listed at Nairobi Securities Exchange, Kenya

Muteru

2024

JOFA

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Kenya’s insurance industry has been growing steadily since 2013, with premium revenue and capital investment increasing. However, Return on Assets has declined over the past four years and reached an all-time low in 2022 compared to the previous five years which was partly attributed to the reforms introduced to cater the impact of Corona virus pandemic on and the need to close infrastructure gaps. As a result, as gross domestic product grows, firm deposits and loans rise along with interest income and loan losses. This study focused on understanding how macroeconomic dynamics affect the profitability of insurance companies listed on NSE in Kenya. It particularly looked into how changes in exchange rates, interest rates, and the overall price rise in the economy (inflation) influence these companies' profits. The study was guided by the theoretical frameworks of purchasing power parity, deflation, the balance of payment, the classical theory of interest, and the balance scorecard model. The study adopted an explanatory research design and targeted the six insurance firms listed on the NSE. The secondary data collection for this study involved the utilization of secondary data sheets. Data was obtained from the official audited financial statements of the insurance firms for the fiscal years 2016 through 2022. Data analysis involved both descriptive and inferential analysis. Inferential analysis incorporated both correlation analysis and panel regression analysis. The study found that key macroeconomic dynamics had significant impact on the profits of insurance companies listed on the NSE, explaining 57.71% of the changes in profits (R-squared = 0.5771). It discovered that while changes in the exchange rate do not significantly affect profits (β = 0.0761, p = 0.5358), higher interest rates lead to higher profits (β = 2.1647, p = 0.0233), and inflation negatively impacts profits (β = -0.3447, p = 0.0011). The study's validity is supported by strong statistical evidence (F-statistic = 21.0100, p-value = 0.0000). It suggests that insurance companies in Kenya should focus on managing risks related to economic changes to improve their financial performance. This research adds to the understanding of how macroeconomic dynamics affect the profitability of insurance firms in the context of the NSE. Keywords: Exchange rates, insurance profitability, interest rates, inflation impact, Nairobi Securities Exchange

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Interest Rate Pass-Through to Macroeconomic Variables: The Nigerian Experience

Cited by 4 publications

References 9 publications

Monetary Policy and Inflation Control: The Case of Nigeria

Monetary Policy and Inflation Control: The Case of Nigeria

Environmental Quality and Economic Development: is there a Kuznets Curve for Air Pollution in Nigeria?

Macroeconomic Dynamics and Profitability of Insurance Firms Listed at Nairobi Securities Exchange, Kenya

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