Exchange rate volatility and banks performance - evidence from Nigeria Department:Business Administration and Management By: Teesoft Project ID: 6402 Rating: (5.0) votes: 2 Price:₦2000 Get the Complete MaterialAbstractThis study empirically examined the effect of exchange rate fluctuation on banks' performance in Nigeria covering the period of ten years between 2005 and 2014. We measured exchange rate fluctuation by return average annual values of US dollar to Naira for the ten-year period. We tested our exchange rate for volatility (ARCH LM test) proving its fluctuating nature. Hausman Test was conducted for the fixed and random effect preferred option. We found that exchange rates fluctuation had an insignificant effect on banks' profitability using ROA as a measure while exchange rates fluctuation had a significant negative effect on banks' liquidity using LDR as a measure. Therefore, we concluded that the effect of exchange rate fluctuation on banks' performance is subjective to the specific measure of performance used in the research. However, our results suggest that further depreciation in the value of naira will lead to a fall in the liquidity position of the banks. As such we recommend that adequate care must be taken in establishing policies within the bank to hedge against foreign exchange risk. Furthermore, the banking sector is a vital part of the Nigerian economy and has contributed immensely to the overall GDP we, therefore, suggest that the monetary authorities of Nigeria should re-assess its trade policies to incorporate strategies (high import duties, Pioneer Status, Preservation of the value of the domestic currency, maintenance of favourable external reserves position and ensure external balance without compromising the need for internal balance) with the sole aim of enhancing naira value. KEYWORDS: Exchange rate Volatility Fluctuation Bank Performance ARCH LM Test....Preview Download Preview +Other Business Administration and Management project topics and materials you might be interested in»The Effect of Management Information System on Achievement of Organization Objectives ( A Case Study of Nitel Owerri )»The impact of production planning and control on a manufacturing process ( a case study of Nigeria bottling company aba, abia state)»The Impact of Staff Discipline in the Attainment of Organizational Objectives ( A Case Study of Selected Organizations in Owerri, Imo State )»The Effect of Motivation on Employees Productivity in Anambra State ( A Case Study of Education Commission Awka )»Marketing implication of merger and acquisition in banking industry - a case study of Access bank Plc, Bida branch, Niger state»The Impact of Performance Appraisal on Staff Productivity ( A Case Study of Diamond Bank Plc, Owerri )»The effect of irregular payment of workers salaries on productivity of workers in imo state (a case study of owerri municipal council)»The impact of welfare packages on employees performance (A case study of Nigeria breweries plc Aba)»A critical evaluation of leadership style and organization performance in the private sector ( a case study of selected establishment in abia state)»The Effects of Motivation on Workers Morale ( A Case Study of Power Holding Company of Nigeria, Aba )»Motivation and Employee Performance in Public Sector ( A Case Study of NTA Channel 12 owerri)»Management Problems of Manufacturing Industries in Nigeria ( A Case Study of Nigeria Breweries Plc and Unilever Plc )»An assessment of the impact of modern communication facilities on service delivery in business organization ( A case study of ICT based firms in aba, abia state)»The Impact of Delegation on Management Decision Making ( A Case Study of Zenith Bank Plc, Enugu )»The Role of Customer Service in the Service Delivery of Multinational Companies in Nigeria ( A Case Study of Unilever Nigeria Plc Aba)