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Impact of Inflation and Exchange Rate on the Financial Performance of Commercial Banks in South Africa

Author

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  • Moyo, Delani
  • Tursoy, Turgut

Abstract

The study examines the impact of inflation and exchange rate on the financial performance of commercial banks in South Africa. The study covers four largest commercial banks in South Africa, namely; Standard bank, Nedbank, Capitec bank and Firstrand bank for the period 2003-2019. To measure the financial performance return on equity was used as the dependent variable and inflation and exchange rate as the independent variables. To achieve the objective of the study, the ARDL, FMOLS and DOLS models are used. The findings illustrated that there is a significant inverse relationship between inflation and the return on equity and there is a weak relationship between exchange rate and the return on equity.

Suggested Citation

  • Moyo, Delani & Tursoy, Turgut, 2020. "Impact of Inflation and Exchange Rate on the Financial Performance of Commercial Banks in South Africa," MPRA Paper 101383, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:101383
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    References listed on IDEAS

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    Cited by:

    1. Lawrence Dumisani Nyathi & David Kureya & Wilfred Petegumbo, 2025. "Role of Macroeconomic Factors Predicting Financial Performance of Commercial Banks in Zimbabwe 1990-2023," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(5), pages 2048-2062, May.
    2. Collin Chikwira & Mohammed Iqbal Jahed, 2024. "Analysis of Exchange Rate Stability on the Economic Growth Process of a Developing Country: The Case of South Africa from 2000 to 2023," Economies, MDPI, vol. 12(11), pages 1-16, October.
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    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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