Interest rate and its impact on household saving in Malaysia / Amirah Najihah Khairun

This paper examines the interest rate and its impact on the household savings in Malaysia. As we know, saving is needed for individuals and business organization which will automatically give an impact towards economic growth. Economic growth is important to develop our country. By doing this research we will also be able to understand how interest rate can gives impact not only towards household saving, but also towards the economic growth. The time frame for the analysis is from year 1987 to 2018 with annualy data observations. The model is tested using time-series and regression methods on dependent and independent variables. The dependent variable used in this research is household saving rate, while independent variables is interest rate, Consumer Price Index (CPI) and unemployment rate. This research not only highlight on how interest rate give an impact to household saving, but it also involved other factor that can give an impact to household saving such as Consumer Price Index (CPI) and unemployment rate. The result indicates that Consumer Price Index and interest rate do influence the saving while the unemployment rate do not influence the saving.