Hagos, Alem (PhD)Fekadu, Alemayehu2018-06-202023-11-082018-06-202023-11-082016-01http://etd.aau.edu.et/handle/123456789/2358The purpose of this research is to identify the factors significant to explain Ethiopian commercial Banks liquidity. This study has categorized the independent factors into bank specific factors and macroeconomic factors. The bank specific factors include Bank Size, Capital Adequacy, Profitability, Non-Performing Loans, and Loan Growth while the macroeconomic factors include Gross Domestic Product, General Inflation and National bank Bill. The panel data was used for the sample of eight commercial banks in Ethiopia from 2002 to 2013 year and estimated using Fixed Effect Model(FEM), data was present by using descriptive statistics and the balanced correlation and regression analysis for liquidity ratios was conducted. The findings of the study show that capital strength and profitability had statistically significant and positive relationship with banks’ liquidity. On the other hand, loan growth and national bank bill had a negative and statistically significant relationship with banks’ liquidity. However, the relationship for inflation, non-performing loans, bank size and gross domestic product were found to be statistically insignificant. The study suggests banks must have increase their outreach to tens of millions of people by openings up more and more branches every year through country, and have significantly improve their banking service by introducing new product and services like Agent banking, Mobile banking and Internet Banking through the application of modern technology. Moreover, banks in Ethiopia should not only be concerned about internal structures and policies, but they must consider both the government regulation and the macroeconomic environment together in developing strategies to improve the liquidity position of the banks. Key words: Ethiopian commercial banks, determinants of liquidity, liquidity ratios, liquidity risk, panel data regression analysis.en-USEthiopian commercial banks; determinants of liquidity; liquidity ratios; liquidity risk; panel data regression analysisThesis