The Impact of USD and EUR Rate Fluctuations on the Financial Performance of the Accepted Banks in Tehran Stock Exchange

Severe fluctuations in exchange rates and the resulting wide spread unreliability is one of the weakening factors in foreign trade, investment and national production and can impact severely on financial institutions’ performance. Management of the exchange rate in the country's economy has always been one of the major challenges for economic policy makers and at all courses in academic circles and Iran economic policy, challenging discussions have been excited about how to determine the exchange rate. Bank is one of the most important financial institutions, in this study we want to investigate the effect of exchange rate fluctuations on the financial performance of the accepted banks in Tehran Stock Exchange. Panel EGLS model was applied to study the impact of USD and EUR rate fluctuations on the Bank's financial performance. The statistical community of the study are the accepted banks in Tehran Stock Exchange, which has been accepted from 2008, the sample of study includes 10 banks. In order to conduct this research, four main hypotheses and three sub-hypotheses were formed. Results show that Changes in USD and EUR affected the financial measures used in this study, negative relation with return on equity indices, return on assets and the different types of bank deposits and has positive relation with the index of different types of bank receivables.