The Implications of Interest Rates on Private Saving with Reference to Myanmar
Nwe Ni Tun1, Ibrahim Mohamed Mohamed Alrajawy2, Amiya Bhaumik3

1Nwe Ni Tun*, Faculty of Business and Accountancy, Lincoln University College, Petaling Jaya, Malaysia.
2Ibrahim Mohamed Mohamed Alrajawy, Centre for Post Graduate Studies, Lincoln University College, Petaling Jaya, Malaysia.
3Amiya Bhaumik, Faculty of Business and Accountancy, Lincoln University College, Petaling Jaya, Malaysia.
Manuscript received on January 02, 2020. | Revised Manuscript received on January 15, 2020. | Manuscript published on January 30, 2020. | PP: 1486-1492 | Volume-8 Issue-5, January 2020. | Retrieval Number: E5906018520/2020©BEIESP | DOI: 10.35940/ijrte.E5906.018520

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Abstract: The private saving is one of the fundamentals for economic development and growth of the country. Thus, the main purpose of this paper is to analyze the effect of interest rates on private saving in Myanmar over the period from fiscal year 2013-14 Q1 to 2018 Q2. This study investigates the private saving of Myanmar’s banking sector which includes twenty seven private commercial banks, four State-owned banks and thirteen foreign bank branches. The quarterly data are obtained from secondary data sources collected from quarterly Financial Statistics Bulletin and annual reports of Central Bank of Myanmar, Statistical Year Books and Selected Monthly Economic Indicators published by CSO, Myanmar, as well as websites from commercial banks to investigate the effect of domestic interest rates on private saving. Inferential analysis including multiple regression analysis and correlation analysis as well as descriptive analysis are applied to examine the effect of domestic interest rates on private saving with the use of Statistical Package for Social Sciences (SPSS) software (version 25). The findings of the study reveal that all independent variables except from Treasury bill rate have significant impact on the savings while inflation and fixed deposit rate have adversely impact on savings. Among all independent variables, saving deposit rate is the most influent variable on attracting private saving. Therefore, the study concludes that policies for ensuring to adopt flexible interest rates structures and for maintaining reasonable inflation rate depending upon the macroeconomic conditions of the economy would be critical to mobilize private saving in Myanmar.
Keywords: Interest Rates, Savings, Banks, Myanmar.
Scope of the Article: Machine Learning.