Cash flow in the financial performance of Libyan banks: An applied study using the Agricultural Republic Bank during the period 2003-2012

This study aimed to measure the impact of inflation and the exchange rate on the financial performance 
of Libyan commercial banks during the period 2002-2006. The study sample consisted of two banks: the 
Republic Bank and the Trade and Development Bank. The data used were time-sequential and longitudinal 
(panel data). The descriptive-analytical method was employed, and after conducting tests to determine 
the appropriate model, a pooled effects model was used. The results showed a significant positive 
impact of inflation on both the return on assets and the return on equity of the Libyan commercial
 banks under study. Similarly, the results showed a significant negative impact of the exchange rate 
on both the return on assets and the return on equity of the Libyan commercial banks under study.
The study recommended a review of banking policies and the development of in-depth exchange rate
 policies to stabilize prices in Libya, which would positively impact the financial performance of 
Libyan commercial banks. It also recommended examining other economic variables related to financial 
performance that were not addressed in this study, in order to further enhance the financial
 performance of Libyan commercial banks.