Whether boom or recession, the big deal is the effect of
employing the factors. When the economy experience expected
boom, the banks enjoy seeing
their borrowed fund being
serviced, and that no bad loans to harm their goals, but when
happen
the unexpected boom, it disturbs demand and supply
due to rising of the price of all the goods and services that
increase the overheads which reduces
the profitability of
banks. Apart from that, the problems comes when the
government employs the monetary
policy and fiscal policy
variables such as rising the interest rates, reduce the
government
spending, discourage loans, and the use of other
tools to reduce money supply in the economy.
With all the above experiences, it is still unknown whether the
variables affect the banks’ performance negatively, positively,
or they have no effect. This is the essence of this research. This
research is to study on how macroeconomic
variables affect
banks’ performance in Tanzania. The remaining paper is
divided as follows; Section 2
reviews the literature and
develop hypothesis, Section 3 defines the data, and
methodology. Section 4
presents the Results, Section 5,
discussion of findings, Finally, Section 6, conclude the
research.
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