Citation :

Owolabi Olufunke Yemi, Olukilede Brenda Nakawooya, 2024. "Impact of Foreign Exchange Rates on Banks’ Profitability in Nigeria (A Case Study of First Bank PLC, Lagos and Ondo Branches)" ESP International Journal of Science, Humanities & Management Studies(ESP-IJSHMS)  Volume 2, Issue 2: 28-40.

Abstract :

Since the foreign exchange rate serves as a channel of communication between buyers and sellers of foreign exchange in an effort to reach a mutually agreeable price for the promotion and progress of international transactions, it has helped banks become more profitable throughout time. In summary, this study looked at the effect of foreign exchange rates on the profitability of Nigerian banks between 2013 and 2022 (using First Bank Plc's Lagos and Ondo branches as a case study).Rate of foreign exchangerelative currency rate, but Bank size, inflation rate, profitability, and proxied interest rate. Descriptive study methodology and an across-sectional research design were used to analyse the data. By distributing a well-structured questionnaire (5-linkert questionnaire), primary sources of data were taken into consideration, and the data were analysed using the Pearson correlation model. Using the Taro-Yamane formula, 146 samples were chosen from the target population of 250 populations. The findings of the hypothesis test showed that there were significant connections and impacts of the hypothesis, with the tested assertions having p-values less than 0.05 (p<00.05).The study found that the foreign exchange rate has a major impact on banks' profits. According to the report, the government should take appropriate steps to protect the value of the national currency by encouraging foreign direct investment. This would lead to economic growth and the appreciation of the local currency, which will make the currency more stable.

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Keywords :

Foreign Exchange, Profitability, Bank.