The Effectiveness of Monetary Policy on the Financial Stability of the Commercial Banks in Somalia

Authors : Zamzam Hassan Mohamed

Volume/Issue : Volume 7 - 2022, Issue 1 - January

Google Scholar :

Scribd :


The purpose of this study is to look into the impact of Somalia's monetary policy on the financial stability of the country's commercial bank and to determine the impact of Open Market Operations on the financial stability of Somalia's commercial banks. This study's goal is to investigate the impact of Somalia's central bank interest rate on commercial bank stability, as well as to analyze the impact of reserve ratio requirements on Somali commercial banks' financial stability, and also the impact of internal and macroeconomic factors on Somali commercial banks' financial stability. The study concentrated on 18 wellknown Somali banks. Data for the study is gathered from published financial statements of Somali commercial banks, monetary policy statements, relevant publications from the Central Bank of Somalia, and other sources. Commercial bank book values are obtained for the years between 2014 and 2020, interest revenue and expense for each year, the weighted average of the central bank's rate, the weighted average of its cash reserve ratio, and the weighted average of its 364 Treasury Bill rates are collected. SPSS and other descriptive statistical techniques aided the researcher in characterizing the data and determining how much of it is used. The T-Bill Rate is found to have a positive effect on the financial soundness of Somali commercial banks. As a result, the researchers concluded that T-Bill rates had a beneficial but limited impact on the financial health of Somalia's commercial banks.

Keywords : Cash Requirement Reserves, Gross Domestic Product, Return On Assets, Statutory Liquidity Requirement.


Paper Submission Last Date
30 - June - 2023

Paper Review Notification
In 1-2 Days

Paper Publishing
In 2-3 Days

Video Explanation for Published paper

Never miss an update from Papermashup

Get notified about the latest tutorials and downloads.

Subscribe by Email

Get alerts directly into your inbox after each post and stay updated.

Subscribe by RSS

Add our RSS to your feedreader to get regular updates from us.