Analysing the effects of interest rate and reserve requirements ratio on bank credit risk in Namibia
| dc.contributor.author | Andreas, Aili | |
| dc.date.accessioned | 2022-01-24T06:25:18Z | |
| dc.date.available | 2022-01-24T06:25:18Z | |
| dc.date.issued | 2020 | |
| dc.description | A thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science in Economics | en_US |
| dc.description.abstract | The study assessed the effect of monetary policy instruments (interest rates and reserve requirements) on banking institutions risk, measured in terms of non-performing loans. The study used quarterly data from Bank of Namibia from 200IQJ to 2017Q3. The study employed the Auto regressive Distributive Lag (ARDL) lag model to determine the effects. Since the reserve requirements is seldom used in Namibia and ever kept at one percent of the bank 's total liabilities to the public, it was considered dormant. Therefore, shocking the reserves requirements up-or down-wards is not plausible in the Namibian economy. The variables considered are non-performing loans (NPL), as a dependent variable and interest rates (!), banks tier I capital (CA), banks ' total assets (TA), gross domestic product (GDP), and private credit extension (CR); as the explanatory variables. The results indicate that there is a short run negative effect between interest rates and bank risk, which implies that the low rate would increase the bank's non-performing loans. The negative relationship indicates that low inflation or price stability does not guarantee financial stability in the economy. The Granger causality results indicate non-causality between interest rates and bank risk, but interest rates Granger cause economic growth and private sector credit that have a direct effect to bank risks. | en_US |
| dc.identifier.uri | http://hdl.handle.net/11070/3086 | |
| dc.language.iso | en | en_US |
| dc.publisher | University of Namibia | en_US |
| dc.subject | Interest rate | en_US |
| dc.subject | Bank credit | en_US |
| dc.title | Analysing the effects of interest rate and reserve requirements ratio on bank credit risk in Namibia | en_US |
| dc.type | Thesis | en_US |