Interest rates risk management by commercial Bank in Tanzania
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Date
2004
Authors
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Publisher
University of Dar es Salaam
Abstract
This was conducted in august and September, 2004 by employing both and field research. The research was a descriptive one and analytical in nature. The main objective of this research was to ascertain, assess and build a better understanding of interest rate risk management and to which extent the interest rate risk management affects the performance of commercial banks in Tanzania. The primary qualitative data obtained during the research on IRRM together with knowledge gathered while conducting in depth interviews from the four commercial banks; NBC Ltd., CRDB Bank Ltd, Standard Chartered Bank Ltd and Citibank (TZ) ltd, have indicated that interest rate risk management is a new concept to most commercial banks because they have been operating in non-market based enjoying a big interest spread margin. In the regression analyses models the major findings observed which requires further study is that lending rate as one of the predictor variable of interest income shows that it has a negative linear relationship i.e. when lending rates increases the interest income earned decreases. Normal common sense, one will agree with the relationship because when lending rate goes up we will expect fewer borrowers for loanable funds and vice versa. In scientific scenario this may not be the case. Further we have noted that lending, treasury bills and interbank rates are significantly correlated indicating that any of the variable can be used to predict interest income to be earned by commercial banks i.e. when both are incorporated in the multiple regression model they exhibit a multicollinearity effect
Description
Available in print form, EAF collection, Dr. Wilbert Chagula Library (THS EAF HG1623.T34M8)
Keywords
Interest rates, Banks, Tanzania
Citation
Mwankenja, Emmanuel M. J (2004) Interest rates risk management by commercial Bank in Tanzania, Masters dissertation, University of Dar es Salaam, Dar es Salaam