Zimbabwe commercial banks liquidity management in the hyperinflation environment
The paper investigated liquidity management by commercial banks when there was hyperinflation. The main enquiry of this study v/as to understand how Zimbabwe commercial banks managed liquidity risk In a hyperintlatlonary environment. To achieve this, information was obtained from primary sources...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Academic Journals
2014
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| Subjects: | |
| Online Access: | http://hdl.handle.net/11408/453 |
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| Summary: | The paper investigated liquidity management by commercial banks when there was hyperinflation. The
main enquiry of this study v/as to understand how Zimbabwe commercial banks managed liquidity risk
In a hyperintlatlonary environment. To achieve this, information was obtained from primary sources
with data collected from decision makers ot fifteen commercial banks which met the criteria of full scale
operation from 2000 -2009. To compliment this, secondary data sources were used. Focal areas ot the
study wore to analyse years of bank business; ownership; liquidity risk management responsibility;
products ottered by commercial banks: major sources of funds and applications; Internal and external
liquid Instruments to manage liquidity risk, impact of inflation on liquidity risk management; and the
effect the Reserve Bank of Zimbabwe instruments introduced to fight inflation. The findings show that
liquidity risk management during tho hyperinflation was a challenge. The Instruments used by the
Reserve Bank of Zimbabwe to fight Inflation had negative effect on commercial banks asset and liability
management. In line with this, the monetary authorities were recommended to put In place measures
which took into consideration the impact of their policies on bank liquidity risk management when there
are problems of high inflation. Tho study also rocommends commeicial banks to take proactive
management measures and long term views to operations, in other words beyond the current
challenges posed by inflation. In the process banks would create new demand for the products. |
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