The analysis of macroeconomic determinants of the banking sector liquidity with role in financing agricultural sector

Abstract

In this study, we aimed to identify the factors of the greatest impact on the banking sector liquidity in order to support agricultural business. The main goal of the research is based on the assessment of whether and how the variation of macroeconomic factors affect the exposure of the banking sector to liquidity risk, which is determined by the willingness of the banking sector to respond to the growing financial needs of agriculture. By using the appropriate statistical methods such as correlation and multiple regression analysis, we obtained significant results that can form the basis for monitoring and measuring il/liquidity of the banking sector in relation to the real agricultural sector. The obtained results confirm inflation and unemployment rates as determinants of liquidity in the banking sector. More importantly, this can help to plan, i.e. predict the funds for agricultural sector.