Impact of Macroeconomic Variables on Commercial Bank Deposits in Nigeria

Authors: KORVE, Verem Stephanie
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This study critically examined the relationship between macroeconomic variables and commercial bank deposit in the Nigerian banking sector. Macroeconomic variables was proxied by inflation rate, and Gross domestic product (GDP), The study which is ex-post facto, relied mostly on secondary data which were collected through the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS) statistical bulletin from 1989-2020. Simple regression Ordinary Least Square (OLS) statistical tool was applied to establish the like fit to the observed data and the degree of relationship that exist between variables. This study aims at examining whether inflation rate and Gross domestic product (GDP) impacts positively or otherwise on Commercial Bank deposits in the Nigerian Banking Sector. The test was employed to establish the causal relationship between the variables. Findings revealed among others that inflation rate measures has positive and significant relationship with commercial bank deposit in Nigeria, while Gross domestic product has positive and significant relationship with commercial bank deposits in Nigeria. The study therefore recommended that Banks should encourage people to save more by fixing the interest deposit based on the level of customer’s deposit such that customer’s who deposit more of their surplus income should earn higher interest rate to act as compensation against the rising trend in inflation.