Effects Of Interest Rate Deregulation On Commercial Banks Credit Creation In Nigeria

ABSTRACT

Interest rates are rental payments for the use c credit by potential borrowers and return for parting with liquidity with lenders. Just like prices1interest rates perform a rationing function by allocating limited supply of credit among many competing demands on it. (CBN 1995) According to Uchendu (1993:35) "Interest ate can be defined as the return or yield on equity opportunity cost of differing current consumption into the future", In yew of these definitions and description, interest rate also has cc tam roles it performs. The primary role of interest rate is to help in the mobilization of financial resources and to ensure efficient utilization of such resources in the promotion of economic growth and development. Interest rate also affect the level of consumption and the pattern of investment.