Effect of Currency Depreciation on Financial Performance of Nigerian Deposit Money Banks
Effect of Currency Depreciation on Financial Performance of Nigerian Deposit Money Banks

Summary/Abstract: The study investigates the influence of currency depreciation on the financial performance of Nigerian deposit money banks. Ex-post facto research design was adopted and ten (10) banks were selected using convenience sampling technique. Secondary data were collected from the annual financial reports of the selected deposit money banks and the Central Bank of Nigeria (CBN)publications over a period of ten years(2008-2017).The analysis was done using a panel Estimated Generalized Least Square method (EGLS) in the form of multiple regressions. The indices of determination for currency depreciation are Inflation Rate (INFR); Interest Rate (INTR); and Exchange Rate (EXCHR).The Return on Asset (ROA) serves as a surrogate for performance. The results of the study show a negative and significant effect of INFR on ROA (p < 0.05);and a negative and significant effect of INTR on ROA (p < 0.05). However, there is a positive and insignificant effect of EXCHR on ROA (p > 0.05).It is recommended that effective fiscal and monetary policies are required by the Federal Government of Nigeria through the Central Bank of Nigeria and the Ministry of Finance to address the adverse effects of inflation and interest rates in Nigeria as these have potential of influencing the performance of deposit money banks.

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