Abstract:
This paper econometrically examines commercial bank performance during the multiple currency period from 2009-2018. A dynamic panel-data model theorized on the Structure-Conduct-Performance paradigm was estimated using the difference generalized method-of-moments (GMM) approach. The key finding is that the multiple currency system, through growth in deposits and money supply, delivered a statistically significant but weak improvement in bank performance. Accordingly, we welcome the recent scrapping of the multiple currency system. Nonetheless, monetary authorities should focus on money supply targeting to contain inflation and preserve the value of the local currency. Furthermore, banks should employ
competitive strategies and be resilient to systematic risk to enhance performance.
