Vol. 5, Issue 3, Part C (2019)

Abstract
This study tries to establish the impact of interest rate deregulation on saving mobilization in Nigeria from 1981 to 2017. The Augmented Dickey-Fuller (ADF) test, co-integration test and Error Correction Model (ECM), were employed in the analysis. The research findings revealed that interest rate and Government policy, proxied by dummy variable, is negative and statistically insignificant on savings mobilization. Also gross capital formation, inflation rate and real GDP are positive but statistically insignificant on savings mobilization in Nigeria. The implication of this is that government policies over the years have hindered commercial banks from performing optimally both in terms of credit allocation to sectors; exchange rate and interest rate determination which are supposed to be market driven. It was therefore recommended that a comprehensive deregulation of interest rate by the monetary authorities be affected so that commercial banks can determine their interest rate based on the market price of goods and services. Also, the central bank authorities must also work hard to reduce inflation to probably single digit on consistent basis since real interest rate levels are affected by inflation.