دانلود Macroeconomic Determinants of Credit Risk in Nepalese Banking Industry

Abstract

This paper aims to investigate the macroeconomic determinants of credit risk in  the  Nepalese  banking  sector  by  means  of  time  series  modelling.  It  is motivated  by  the  hypothesis  that  macroeconomic  environment  such  as business  cycle,  inflation,  money  supply,  market  interest  rate  and  foreign exchange fluctuation influence the banks’ credit risk which is proxied by Nonperforming  Loan  (NPLs).  Using  annual  series  that  spam  from  2001-2011, this paper cover both the booming period and the recent financial crisis. The findings of paper conclude that macroeconomic variables inflation and foreign exchange fluctuation has influenced on credit risk of banks in Nepal.  The results have several implications for policymakers, regulators and  managers as the study covers the recent crisis period and also fill the gap in research  as  the  best  knowledge  the  first  in-depth  study  in  the  determinants of credit risk in context of Nepal.