Zimbabwean Commercial Banks Performance under Multiple-Currency System: A Dynamic Panel Data Analysis

Caroline Makumbe, Regret Sunge and James Zivanomoyo ()
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James Zivanomoyo: Great Zimbabwe University

The African Finance Journal, 2020, vol. 22, issue 2, 40-51

Abstract: This paper econometrically examines commercial bank performance during the multiple currency period from 2009-2018. A dynamic panel-data model theorized on the Structure-Conduct-Performance paradigm was estimated using the differencegeneralized method-of-moments (GMM) approach. The key finding is that the multiple currency system, through growth in deposits and money supply, delivered a statistically significant but weak improvement in bank performance. Accordingly, we welcome the recent scrapping of the multiple currency system. Nonetheless, monetary authorities should focus on money supply targeting to contain inflation and preserve the value of the local currency. Furthermore, banks should employ competitive strategies and be resilient to systematic risk to enhance performance.

JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:22:y:2020:i:2:p:40-51

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