Record Details

Explaining Interest Rate Spread In Namibia

International Business & Economics Research Journal

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Field Value
 
Title Explaining Interest Rate Spread In Namibia
 
Creator Eita, Joel Hinaunye
 
Subject Economics
Interest Rate Spread; Financial Deepening; Financial Sector Efficiency; Namibia
 
Description This paper investigates the determinants of interest rate spread in Namibia for the period 1996-2010. The investigation is conducted through cointegrated vector autoregression (VAR) or multivariate cointegration methods. The investigation reveals that interest rate spread in Namibia is determined by Treasury bill rate, inflation rate, the size of the economy, financial deepening, bank rate or discount rate and exchange rate volatility. Treasury bill rate, inflation rate and bank rate are associated with an increase in interest rate spread. The size of the economy and financial deepening are associated with a decrease in interest rate spread. The results suggest that an increasing interest rate policy pursued by the government can cause interest rate spread to rise. Increase in the cost of funds to commercial banks may be passed to consumers in the form of higher interest rate spread. An increase in the cost of doing business will cause interest rate spread to rise. Interest rate spread can be reduced by increasing the size of the economy which allows for economies of scale and greater competition. Financial deepening, which allows a high level of interbank competition, can also reduce the interest rate spread.
 
Publisher The Clute Institute
 
Date 2012-09-19
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://www.cluteinstitute.com/ojs/index.php/IBER/article/view/7258
10.19030/iber.v11i10.7258
 
Source International Business & Economics Research Journal (IBER); Vol 11 No 10 (2012); 1123-1132
2157-9393
1535-0754
10.19030/iber.v11i10
 
Language eng
 
Relation https://www.cluteinstitute.com/ojs/index.php/IBER/article/view/7258/7327