Interest Rate Liberalisation in Nigeria: Implications and Prospects

The objective of the paper is to review the empirical and the theoretical literature on the challenges and implications of Interest rate liberalisation policy in Nigeria. The results of the review show that, in Nigeria, the outcome of the policy has been positive on the economy. However, in some cases, the policy has led to other challenges in some sectors of the economy. This paper therefore, points out that, careful considerations should be given to the implementation process as it may have unexpected impacts on other non-financial sectors of the economy. Thus, policy makers should consider putting in place, proper sequencing of the liberalisation policies to thwart any possible negative effects that may occur, as a result of the implementation of interest rate liberalisation.