Macroeconomic Policies, Currency Risks and Banks� Competitiveness

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Author	Tonny Ssewankambo, Samuel Pule
ISSN	2307-2466
On Pages	124-137
Volume No.	4
Issue No.	3
Issue Date	August 01, 2020
Publishing Date	August 01, 2020
Keywords	Macroeconomic Policies, Currency Risk, Banks Competitiveness

Abstract

This paper assesses the relationship between macroeconomic policies, Currency risks, and Banks� Competitiveness. Specifically, the study analyzed: (1) the relationship between monetary, fiscal policies and banks� competitiveness; (2) the relationship between exchange rate volatility, value at risk, credit worthiness, deteriorating loan portfolio and banks� competitiveness. To operationalise these objectives, a cross-sectional and descriptive research design was used to report on the study phenomenon. A researchers� made questionnaire was then used to collect data from a population of 200 respondents which were sampled to 185 respondents using the Krejcie and Morgan (1972) sampling method. Purposive, stratified and simple random sampling techniques were devised to collect data depending on the category of respondent targeted. Data was analyzed using the Statistical Package for Social Scientist (SPSS) computer programme. Specifically, the Pearson (r) correlation coefficient was used and indicated a significant and positive relationship between macroeconomic policies, currency risks and Banks� competitiveness (r value = .491**, p<.01; r value = .301**, p<.01) respective. On the other hand, the regression analysis predicted a moderated influence of (R value = 27.7%, and sig. 0.001) between macroeconomic policies, currency risks and Banks� Competitiveness. The researchers therefore concluded that, macroeconomic policies and currency risks positively relate with Banks competitiveness. Whenever macroeconomic policies and/ or currency risks are favorable, banks will be competitive and reverse is true. In this regard, managers ought to be proactive in forecasting and monitoring government policies, be it fiscal or monetary, and ensure that costs charged on loan facilities are reasonable to attract clients thus enhancing Banks competitiveness.

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