Abstract:
The study on the influence of inflation on financial operations was conducted at
CRDB bank. The objectives of the study were; to identify issues which cause
inflation in tanzania; to analyze techniques which are used by the bank to combat
inflation and to assess the extent inflation influenced bank operations.
A case study design was used where as 80 respondents were cosidered as a sample
size. Data collection methods were questionare, inteview and documentary
analysis.where as data collection instruments were questionare, interview questions
and documentary analysis schedule. Data were presented by using table and graphs.
The study found that, there are different issues that can cause inflation in tanzania.
The major causes for inflation involves; raw material prices, public expenditure, oil
price and money circulation. Also, the study found significant number of the
respondents (25%) identified fiscal and monetary policy as a major technique used
by the bank to combat inflation. The study found majority of the respondents
(77.5%) suggested inflation has high influence on bank operations.
The study concluded that, there are different issues that can cause inflation in
Tanzania. The major cause of inflation involves; labour market, import prices, raw
material prices, public expenditure, oil price, money circulation and decline in
productivity. Also, the study concluded that there are various techniques that can be
used to control inflation. Inflation can be controlled though; Fiscal and monetary
policy, increase interest rate, reduces export demand, making import cheaper,
increase saving rate and control wage. The study recommended that bank operating
expenses should be considered as a determinant and prerequisite for improving bank
performance, since expenditure are controllable expenses.
