The Effect of Foreign Exchange Rate Fluctuation on The Financial Performance of Private Commercial Banks in Ethiopia
| dc.contributor.advisor | Degefe Duressa (PhD) | |
| dc.contributor.author | Biruktawit Yohannes | |
| dc.date.accessioned | 2025-08-06T11:58:31Z | |
| dc.date.available | 2025-08-06T11:58:31Z | |
| dc.date.issued | 2025-05-18 | |
| dc.description.abstract | In an increasingly volatile macroeconomic environment, understanding how foreign exchange rate fluctuations affect banking performance is essential for financial stability. This study examines the effect of foreign exchange rate fluctuations on the financial performance of private commercial banks in Ethiopia over the period from 2010 to 2024 using panel data. The analysis was conducted using STATA 16 software and employed a random effects regression model to analyze the effect of foreign exchange rate fluctuation alongside key macroeconomic (inflation, GDP) and bank-specific factors (bank size, capital adequacy ratio, net interest margin) on Return on Assets (ROA). The findings reveal that foreign exchange rate fluctuation had a negative and statistically significant effect on bank performance, indicating the risks posed by currency instability. Inflation and GDP were found to have a positive and significant effect on ROA, while capital adequacy and bank size also contributed positively. However, Net interest margin was found to be statistically insignificant. These results highlight the importance of effective foreign exchange risk management in mitigating external shocks. Regulatory measures and macroeconomic policies aimed at reducing foreign exchange rate fluctuation and strengthening financial supervision are therefore essential. Key Words: Foreign exchange rate fluctuations, financial performance, commercial banks, risk management. | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/6088 | |
| dc.language.iso | en | |
| dc.publisher | A.A.U | |
| dc.title | The Effect of Foreign Exchange Rate Fluctuation on The Financial Performance of Private Commercial Banks in Ethiopia | |
| dc.type | Thesis |