The effect of interest rates policy on the performance of Algerian public banks

Abstract EN

This study attempts to examine the performance of public banks being operated in Algeria based on the interest rates policy.

For this purpose, an analysis of the financial statement of five major banks over the period (1997-2012) has been done.

Meanwhile, the paper uses correlation and regression analysis for a panel data sample in order to evaluate the impact of interest rate changes measured by real interest rate (RIR) over the performance indicators: return on equity (ROE), return on assets (ROA), and net interest margin (NIM).

The results show that interest rate policy does not impact the performance of the Algerian public banks.

Therefore, the study recommends that the interest rate in the financial market must be market-driven to allow for efficient financial process