Impact of Interest Rate on Portfolio Management in Nigeria

Ayodele, Ademola E. and Afolabi, Babatunde and Olaoye, Awoniyi C. (2017) Impact of Interest Rate on Portfolio Management in Nigeria. Asian Journal of Economics, Business and Accounting, 2 (4). pp. 1-10. ISSN 32882

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Abstract

This study carried out an investigation on the impact of interest rate on portfolio management in Nigeria. Specifically the study analyzed the impact of interest rate on both long term and short term portfolio investments in Nigeria using secondary data sourced from Central bank of Nigeria statistics bulletin and National bureau of statistics for the periods covering 1985 to 2014. The study employed the techniques of co-integration and error correction model, it was discovered that on the long run interest rate specifically prime lending rate significantly influenced portfolio management both on long and short term basis and that total savings exert significant positive impact on the portfolio investment both on long and short term basis. Hence the study recommended that monetary authorities should ensure that the nexus between interest rate and portfolio management is taken into consideration in the process of policy formulations.

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