<strong>Background</strong>: <span style="font-family:;" "=""><span style="font-family:Verdana;">Economic theory suggests that monetary policy through interes...<strong>Background</strong>: <span style="font-family:;" "=""><span style="font-family:Verdana;">Economic theory suggests that monetary policy through interest rates affects bank profitability. There is limited empirical evidence on the relationship between monetary policy and profitability of commercial banks in Uganda. </span><b><span style="font-family:Verdana;">Objective: </span></b><span style="font-family:Verdana;">This study seeks to examine the effect of monetary policy on the profitability of commercial banks in Uganda. </span><b><span style="font-family:Verdana;">Methodology:</span></b><span style="font-family:Verdana;"> The study adopts a causal relationship research design. </span><span style="font-family:Verdana;">Data, covering 9 years from 2010-2018, was collected from all the registered commercial banks which were in operation over the study period. Various monetary policy variables are included in the empirical model as predictor variables. </span><span style="font-family:Verdana;">Return on </span></span><span style="font-family:Verdana;">A</span><span style="font-family:;" "=""><span style="font-family:Verdana;">ssets is used as a measure of bank profitability</span><span style="font-family:Verdana;">. A </span><span style="font-family:Verdana;">dynamic two-step System Generalized Method of Moments panel estimator is applied to estimate the empirical model. </span><b><span style="font-family:Verdana;">Findings:</span></b><span style="font-family:Verdana;"> Estimates show that monetary policy in terms of its link to the lending rate</span></span><span style="font-family:;" "=""> </span><span style="font-family:Verdana;">has a significant causal effect on Return on Assets, suggesting that interest rate changes predict bank profitability of commercial banks in Uganda.</span><span style="font-family:;" "=""> </span><span style="font-family:Verdana;">Further, results</span><span style="font-family:;" "=""> </span><span style="font-family:Verdana;">show that a rise in core inflation has a significant展开更多
文摘<strong>Background</strong>: <span style="font-family:;" "=""><span style="font-family:Verdana;">Economic theory suggests that monetary policy through interest rates affects bank profitability. There is limited empirical evidence on the relationship between monetary policy and profitability of commercial banks in Uganda. </span><b><span style="font-family:Verdana;">Objective: </span></b><span style="font-family:Verdana;">This study seeks to examine the effect of monetary policy on the profitability of commercial banks in Uganda. </span><b><span style="font-family:Verdana;">Methodology:</span></b><span style="font-family:Verdana;"> The study adopts a causal relationship research design. </span><span style="font-family:Verdana;">Data, covering 9 years from 2010-2018, was collected from all the registered commercial banks which were in operation over the study period. Various monetary policy variables are included in the empirical model as predictor variables. </span><span style="font-family:Verdana;">Return on </span></span><span style="font-family:Verdana;">A</span><span style="font-family:;" "=""><span style="font-family:Verdana;">ssets is used as a measure of bank profitability</span><span style="font-family:Verdana;">. A </span><span style="font-family:Verdana;">dynamic two-step System Generalized Method of Moments panel estimator is applied to estimate the empirical model. </span><b><span style="font-family:Verdana;">Findings:</span></b><span style="font-family:Verdana;"> Estimates show that monetary policy in terms of its link to the lending rate</span></span><span style="font-family:;" "=""> </span><span style="font-family:Verdana;">has a significant causal effect on Return on Assets, suggesting that interest rate changes predict bank profitability of commercial banks in Uganda.</span><span style="font-family:;" "=""> </span><span style="font-family:Verdana;">Further, results</span><span style="font-family:;" "=""> </span><span style="font-family:Verdana;">show that a rise in core inflation has a significant
