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Effect of Interest Rates on Inflation in Kenya

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Summary

This study aims to investigate the expected relationship between inflation rate and interest rate in Kenya and its impact on economic decision making in the future. The study will adopt a correlational design and use secondary data from 1980 to 2020 gathered from the Kenya Bureau of Statistics and the Central Bank of Kenya. The study will analyze the data through various statistical methods including descriptive analysis, correlation analysis, regression analysis, and Granger-causality testing. The expected results will provide insights into the direction of the relationship between inflation rate and interest rate and the impact of other variables such as GDP growth and money supply on interest rates. The findings of this study will inform policymakers on the most effective methods for managing interest rates in Kenya to stimulate borrowing and promote economic growth.

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