The Effect of Inflation on Performance

An Empirical Investigation on the Banking Sector in Jordan

This paper aims to investigate the effect of inflation trends on the performance of the banking sector in Jordan., with data from five Jordanina listed banks in Amman Stock Exchange over the period of 2009–2019. The performance indicators employed in this study are return on assets, return on investment, and margin of net interest. Our empirical strategy for this quantitative approach employ regression analysis to explore th influential of inflation on banks’ performance. The results of descriptive statistics show that the banks’ performance in Jordan has increased gradually during the period 2015 to 2018, meaning that banking sector had performed of this study effeciantly during the period of study regardless of the increasing of inflation rate in the country. Generally, our results show that there is a strong and negative relationship between inflation rate and banks’ performance. In addition, the results show that the Banks’ performances are significantly affected by inflation. Interested parties may pay attention to other macroeconomic variables to investigate the impact of the macroeconomic factors on Banks’ performance. Future research shall consider not only bankin sector but other sectors in the financial market.