Browsing by Author "Uwanyirigira, Enatha"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    Monetary policy and financial performance of commercial banks in Kigali, Rwanda
    (Kampala International University, College of Economics and Management, 2017-10) Uwanyirigira, Enatha
    This study investigated the effect of monetary policy on the financial performance of commercial banks in Rwanda. The following objectives guided the study: i) to evaluate the effect of Central Bank’s open market operations on the financial performance of Commercial Banks in Rwanda; ii) to examine the effect of Central Bank Rate (CBR) on the financial performance of Commercial Banks in Rwanda; and iii) to investigate the effect of Reserve Requirement ratio on the financiL~ performance of Commercial Banks in Rwanda. The study adopted cx post facto research design. The data source was fi~orn annual report publications by the National Bank of Rwanda. Data was analysed using multiple regression model. The study found no significant effect of Central Bank’s Open Market Operations on the financial performance of commercial banks in Rwanda (p=O.200>O.05). Similarly, the study found no significant effect of the central bank iate on the financial performance (Return on Assets) of commercial banks in Rwanda (p=O.53 1>0.05). In addition, the study found no significant effect of reserve requirement ratio on the financial performance (return on assets) of commercial banks in Rwanda (p0.605>0.05).The study concluded that monetary policy has no significant effect on return of assets of commercial banks in Rwa1~J~~ The study made the following recommendations: the need for commercial banks not to keep excess reserve on which they can draw in the event of a restrictive monetary policy because it affects open market operations, the need for the monetary authorities to make efforts towards having a relative stability in the level of interest rate and the need for the central bank of Rwanda to make reserve requirement ratio a major fulcrum on which monetary policy would be based in order to improve the effectiveness of the monetary policy on the commercial banks.