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Akinlo, A.E. and Egbetunde, T. (2010) Financial Development and Economic Growth: The Experience of 10 Sub-Saharan African Countries Revisited. The Review of Finance and Banking, 2, 17-28.

has been cited by the following article:

  • TITLE: Determinants of Bank Deposits in Ghana: Does Interest Rate Liberalization Matters?

    AUTHORS: Eric Kofi Boadi, Yao Li, Victor Curtis Lartey

    KEYWORDS: Bank Deposits, Real Savings Rates, Exchange Rate Movements, Real Treasury Bill Rate and Gross Domestic Product

    JOURNAL NAME: Modern Economy, Vol.6 No.9, September 23, 2015

    ABSTRACT: This research paper examines the effect of interest rate liberalization on bank deposits in a developing country Ghana. A deposit function model was specified with long term deposit as the main dependent variable with real savings rate, real treasury bill rate, exchange rate movement and gross domestic product as independent variables while controlling for inflation. Ordinary Least Squares (OLS) method was used to estimate the specified model which covered seasonally adjusted quarterly data drawn from Bank of Ghana and Ghana Statistical Service. The data were input into a spreadsheet and exported into Econometric View 7 which was used for processing the data. The results of the study revealed that the interest rate liberalization and gross domestic product jointly accounted for about 78% of the variation in the level of bank savings deposits in Ghana. The study has also shown that the liberalization of the interest rates has made it attractive for people with idle funds to save with financial institutions especially the banks. It also revealed a negative relationship between real savings rate and the real treasury bill rate expected in a high inflationary environment. All the independent variables were significant. It is therefore recommended that the Bank of Ghana remains resilience on interest rate liberalization so that surplus funds can be made available for investors and also to reduce the level of inflation in Ghana.