The Relationship between Deposit and Lending Rates in Namibia

Authors

  • Johannes Peyavali Sheefeni Sheefeni Department of Economics University of Namibia

Keywords:

Deposit interest rate, lending interest rate, linear, symmetric, imperfect competition, mark-up theory, error correction models, Namibia

Abstract

This paper analyses the relationship between deposit interest rates and lending interest rates in Namibia. The objective is to test whether a linear and symmetric relationship holds for Namibia in the long run. Using monthly data for the period 1992:01 – 2012:12, the paper employed time series techniques, namely, unit root tests, and the cointegration test. The unit root test revealed that the series are non- stationary. The cointegration test showed that there is no cointegration among the variables. Hence, there is no long-run relationship between the deposit interest rate and the lending interest rate in Namibia. The study rejects the hypothesis of a linear and symmetric relationship in the Namibian context. In the absence of cointegration the study could not proceed with the Granger causality test.

 

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Published

2013-10-14

How to Cite

Sheefeni, J. P. S. (2013). The Relationship between Deposit and Lending Rates in Namibia. Asian Journal of Business and Management, 1(4). Retrieved from https://ajouronline.com/index.php/AJBM/article/view/512