The Effect of Exchange Control on the Performance of Commercial Banks in Ethiopia
| dc.contributor.advisor | Jemal Mohammed (Phd) | |
| dc.contributor.author | Dereje Bayissa | |
| dc.date.accessioned | 2025-01-27T11:53:35Z | |
| dc.date.available | 2025-01-27T11:53:35Z | |
| dc.date.issued | 2024-06-26 | |
| dc.description.abstract | This study investigated the impact of the foreign exchange control directive, implemented in Ethiopia since 2016 G.C, on the performance of commercial banks. The directive requires banks to allocate at least 50 percent of foreign exchange to priority imports, potentially affecting their financial performance. The study used five years of data from 2019 to 2023 or 80 observations from 16 commercial banks. This study assessed the distribution of foreign exchange to both priority and non-priority sectors, as well as its impact on bank performance metrics such as Return on Assets (ROA) and Return on Equity (ROE). The study used a quantitative research design to obtain a complete understanding using secondary data and a purposive sampling technique. Descriptive and Regression analyses were used to evaluate the data. In this study, Random effect model was selected to be suitable for panel data. The aim is to answer critical questions regarding the allocation practices of foreign currency by commercial banks in Ethiopia and to evaluate the consequent effects on their performance. The study's objectives include assessing the allocation of foreign currency to priority and non-priority sectors, examining its impact on bank performance and exploring the operational efficiency, assets of the bank and sources of income as control variables. The study's finding suggested that, operational efficiency and bank assets are important determinants of bank performance, and also allocation of at least 50 percent of foreign currency to priority products has both positive and negative effects on bank performance. The findings of this research provided valuable information for policymakers, banking regulators, and financial institutions and can also serve as a basis for further studies. | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/4130 | |
| dc.language.iso | en | |
| dc.publisher | A.A.U | |
| dc.title | The Effect of Exchange Control on the Performance of Commercial Banks in Ethiopia | |
| dc.type | Thesis |