Temesgen Kebede

Determinants of Interest Rate Spread in Ethiopia: Determinants of Interest Rate Spread in Ethiopia: a Time Series Analysis Temesgen Kebede

Financial intermediaries play a great role in economic development endeavors. Those intermediaries play their role under the umbrella of the central bank of a given nation with the principles of profitability, safety and liquidity. The more financial intermediary?s liquid, the less they are profitable. To be more profitable, financial intermediaries are expected to be efficient. One way to measure or determine the efficiency of financial intermediaries is using interest rate spread ? the difference between average lending rate and average deposit rate. The higher the magnitude of the spread is the inefficient the intermediaries.