The impact of exchange rate fluctuations on the financial performance of the banks listed on the Palestine Stock Exchange

Abstract

The study aimed to identify the impact of exchange rates fluctuations of major currencies in Palestine on the financial performance of banks listed in Palestine Exchange during the period from 2006 to 2014. The study used some financial performance indices such as return on assets (ROA), return on equity (ROE), earning per share (EPS), the stock turnover rate, and the market value of bank shares. The study population included all banks listed in Palestine exchange, and it was a comprehensive survey of all the study population. To achieve the objectives of the study, the researcher followed a descriptive analytical approach because it is the most suitable for the phenomenon under study.In addition, the researcher used several descriptive statistical methods such as arithmetical mean, correlation coefficient and the model used is the multiple linear regression to test the study hypotheses. Moreover, the study concluded a number of findings, the most important of which are: There is no statistically significant impact at level (α ≤0.05) of the exchange rate fluctuations on the financial performance of the banks indicators (ROA, ROE, EPS, the stock turnover rate, and the market value of bank shares), the results of this study were different from the results of several previous studies. Furthermore, the study recommended It is necessary to conduct further studies in order to have a clear idea about the factors influencing the financial performance of banks listed in Palestine Securities Exchange.it is also recommended to increasing the degree of disclosure by Palestine Securities Exchange and the banks therein listed in the financial reports about information relating to foreign currencies and the mechanisms of dealing with fluctuations of exchange rate.