Abstract:
This study examines the impact of interest rate on the financial performance of listed manufacturing firms in Nigeria from 2009 to 2018. The dependent variable of the study was financial performance measured by return on assets (ROA) and return on equity (ROE), while the independent variable was interest rate (ITR). Secondary data on financial performance was obtained from the annual reports and accounts of 28 sampled manufacturing companies for the period 2009 – 2018 while data for interest rate was obtained from the Central Bank of Nigeria (CBN). Correlation research design was adopted and cross sectional/time series data was extracted from the reports of the firms, while and panel multiple regression was used to analyse the data in order to establish relationship between the variables usingEviews-10.The findings showed that Interest rates had a significant impact on ROA but no significant impact on ROE of listed manufacturing firms in Nigeria. It is therefore recommended that interest rates should be set at values that would not negatively impact the financial performance of listed manufacturing firms in Nigeria.
