AZƏRBAYCANDA BANKLARIN MALİYYƏ SABİTLİYİNƏ TƏSİR EDƏN MAKROİQTİSADİ AMİLLƏRİN TƏDQİQİ
STUDY OF MACROECONOMIC FACTORS AFFECTING THE FINANCIAL STABILITY OF BANKS IN AZERBAIJAN

Summary/Abstract: This research has analyzed the relationship between macroeconomic indicators and the financial stability of Azerbaijani banks during the years 2018-2022. The macroeconomic indicators used in the research are the interest rate, inflation, and exchange rate fluctuations. Three hypotheses were put forward during the research. The first one relates to the impact of inflation on the financial stability of banks, the second one relates to the impact of the interest rate on the stability of banks, and the third one relates to the relationship between exchange rate fluctuations and the financial stability of banks. The financial stability index (FSI) was used to determine the financial stability of the banks. The FSI represents the ratio of financial income to financial expenses. The correlation method was initially used to measure the level of relationship between the indicators. Later, the multiple regression method was used to measure the impact of macroeconomic factors on the financial stability of all banks in Azerbaijan. The results of the research showed that there is a relationship between macroeconomic factors and the financial stability of banks overall. The financial stability of banks is more closely related to the interest rate and inflation. However, no relationship was found between the financial stability of banks and the fluctuations in the manat to dollar exchange rate.

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