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Zimbabwean Commercial Banks Liquidity and Its Determinants

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  • Wilbert Chagwiza

Abstract

The liquidity problems are bedeviling Zimbabwean commercial banks since the introduction of multi-currency system and this is impacting the economic development. After the 2003 to 2004 liquidity crisis, the central bank has re-emphasised on liquidity needs, and thus liquidity is very important for functioning of financial markets and the banking sector. The aim of this paper is therefore to identify determinants of liquidity of Zimbabwe commercial banks. The data cover the period from January 2010 to December 2011. The regression analysis was used and it has been found that there is a positive link between bank liquidity and capital adequacy, total assets, gross domestic product and bank rate. We have found that the adoption of multi-currency, inflation rate and business cycle have a negative impact on liquidity. It seems the banks size and their liquidity is positively correlated.

Suggested Citation

  • Wilbert Chagwiza, 2014. "Zimbabwean Commercial Banks Liquidity and Its Determinants," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 2(2), pages 52-64.
    • Handle: RePEc:rss:jnljef:v2i2p1
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    Cited by:

    1. Vu Thi Phuong Thao & Le Trung Thanh, 2021. "An Empirical Analysis of Macroeconomic and Bank-Specific Factors Affecting Bank Deposits in Vietnam," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(2), pages 172-183, April.
    2. Pham Tien Dat & Kim Quoc Trung Nguyen, 2023. "Foreign ownership and national governance quality affect liquidity risk – case in Vietnam," Cogent Business & Management, Taylor & Francis Journals, vol. 10(2), pages 2244752-224, December.
    3. Ghanim Shamas & Zairani Zainol & Zairy Zainol, 2017. "The Moderating Role of Staff Efficiency in the Relationship between Bank¡¯s Specific Variables and Liquidity Risk in Islamic Banks of Gulf Cooperation Council (GCC) Countries," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(12), pages 278-290, December.

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