The Nigerla inter-bank and monetary policy rates nexus: any discernable long run relationship?

Abstract

Interbank markets are among the most important in the financial system. They are the focus of central banks implementation of monetary policy and have a significant effect on the economy. It is the relationship between the inter-bank and monetary policy rates that this paper examined. The findings indicate that the rates are co-integrated and have a long-run relationship, judging from the significance of the unit root test for the residual and the coefficient of the error correction variable in the error correction model.