Volatility Contents of Exchange Rate and Profitability of Deposit Money Banks in Nigeria

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dc.contributor.authorYahaya, Khadijat
dc.contributor.authorRamat, Titilayo Salman
dc.contributor.authorOlufemi, Tolulope Olayinka
dc.date.accessioned2021-10-12T10:47:11Z
dc.date.available2021-10-12T10:47:11Z
dc.date.issued2021
dc.description.abstractOrganizations exist in a dynamic environment and the failure of organizations to manage their foreign exposures well may have adverse effects on their returns. The study investigated the effect of volatility in foreign exchange rates on Nigerian deposit money banks' profitability. The target population constitutes 22 listed banks and 7 deposit money banks was selected as sample size using purposively sampling techniques. The regressions showed that foreign exchange rate volatility has a positive effect on return on assets, return on equity, and capital adequacy ratio. An increase in exchange rate volatility results in a 6.52, 78.81 , and 38.53 increase in return on assets, return on equity, and capital adequacy ratio, respectively. However, these positive effects are insignificant as the p-value of 0.3403, 0.767, and 0.1877 are greater than the 10, 5, and 1 levels of significance. The regression results also showed that foreign exchange rates affect the net interest margin of Nigerian deposit money banks. An exchange rate increase of one unit leads to a net interest margin decrease of 3.25 percent. The negative effect is nevertheless negligible since the p-value of 0.7008 is higher than 5. It was concluded that the profitability of Nigerian deposit money banks is influenced by the foreign exchange rate, inflation, interest rate, and bank size. According to the findings, robust foreign exchange rate policies could be instituted by bank management as an efficient measure of managing exchange rate risk.en_US
dc.identifier.issn2736-1381
dc.identifier.urihttps://uilspace.unilorin.edu.ng/handle/20.500.12484/6573
dc.language.isoenen_US
dc.publisherDepartment of Accounting, Adekunle Ajasin University Akungba-Akokoen_US
dc.relation.ispartofseries6;1
dc.subjectBanksen_US
dc.subjectCapitalen_US
dc.subjectForeign exchangeen_US
dc.subjectProfitabilityen_US
dc.subjectVolatilityen_US
dc.titleVolatility Contents of Exchange Rate and Profitability of Deposit Money Banks in Nigeriaen_US
dc.typeArticleen_US

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