The Impact of interest rate fluctuations on bank profitability in Zimbabwe from 2000 to 2024 · Electronic Theses and Dissertations

Author: Ben, Chipo
Title: The Impact of interest rate fluctuations on bank profitability in Zimbabwe from 2000 to 2024
Abstract: This study aimed at investigating how changes in interest rates influence banks earnings within Zimbabwe's unstable economic environment. My curiosity led me to dig into 24-year worth of data from 2000 to 2024. The study employed the autoregressive distributed lag approach as a statistical technique to investigate the impact. This method allowed me to analyze both immediate and delayed effects of interest rate movements in the profitability of banks. The study showed a high inflation rate of 70.23% and low average ROA of 1.6%, reflecting economic instability. ARDL results confirmed a long-run relationship where F = 6.0861and R squared = 0.664. Currency rate changes significantly affect ROA in the short term, while both lending rates and currency levels negatively impact it in the long run. So, it means they need to keep a close eye on exchange rate fluctuations and develop strategies to control their impact. By doing so they can help banks maintain and control the effects on the Zimbabwe's financial markets. It brings out the status of evaluating the complexity of emerging markets and the need for policymakers to be proactive in managing economic risks.
Date: June 2025
Publisher: BUSE
Keywords: Interest Rate Fluctuations; Bank Profitability
Supervisor: Basira , K