Monetary Policy and Financial Performance of Commercial Banks in Kenya

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dc.contributor.authorKithandi, Charles Katua
dc.date.accessioned2022-08-22T09:08:38Z
dc.date.available2022-08-22T09:08:38Z
dc.date.issued2022-06
dc.descriptionJournal Articleen_US
dc.description.abstractThis study has been done to address the research gaps in the effect of monetary policy of commercial bank’s financial performance. The key objectives of the study were to establish the following; the effect of changes in central bank rate on financial performance of commercial banks in Kenya, the effect of reserve ratio requirement on financial performance of commercial banks in Kenya and, the effect of repo rate on financial performance of commercial banks in Kenya. The study was carried out covering a five-year time frame period from 2016 to 2020. The independent variables of the study involved: cash reserve ratio, Central bank rate, and the repo rate. Return on equity was used as the dependent variable. The study used descriptive longitudinal research design. The total population consisted of all the commercial banks, which is forty-two in number, licensed to operate in Kenya by the Central Bank of Kenya. The study employed various research tests; Durbin-Watson, quantile-quantile plot and normality test were applied in research finding analysis. The study found out that a negative relationship exists between both Central Bank rate and cash reserve ratio requirement and return on equity (financial performance) of commercial banks in Kenya. The research findings also showed that a positive relationship exists between repo rate and the return on equity (financial performance) of commercial banks in Kenya. In Conclusion, the study concluded that monetary policy affects profitability and financial performance of commercial banks in Kenya. The study recommends that, for central bank to stimulate economic growth, central Bank rate needed to be monitored and maintained low.en_US
dc.description.sponsorshipSchool of Business and Economics, Daystar University, Kenyaen_US
dc.identifier.citationKithandi, C. K., (June, 2022). Monetary Policy and Financial Performance of Commercial Banks in Kenya. The International Journal of Business & Management. Vol 10 Issue 6 DOI No.: 10.24940/theijbm/2022/v10/i6/BM2206-007en_US
dc.identifier.issn2321–8916
dc.identifier.urihttps://repository.daystar.ac.ke/handle/123456789/3963
dc.language.isoenen_US
dc.publisherThe International Journal of Business & Managementen_US
dc.subjectMonetary policyen_US
dc.subjectContractionary Monetary Policyen_US
dc.subjectExpansionary Monetary Policyen_US
dc.subjectInflationen_US
dc.subjectOpen Market Operationsen_US
dc.subjectRepo rateen_US
dc.titleMonetary Policy and Financial Performance of Commercial Banks in Kenyaen_US
dc.typeArticleen_US

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