Macro-Economic and Bank-Specific Determinants of Liquidity:

Abstract

The objectives of this study are to explore macroeconomic and bank-specific variables that influence the liquidity positions of Islamic banks in Bangladesh. For the empirical analysis, secondary data was collected form the different banks financial statements, World Bank and Bangladesh bank publications spanning 2009-2020.The panel data ware analysed using a random effect regression model. The study,s findings showed that bank size CAR, ROA ,DEP, and INF are statistically significant drivers of Islamic banks, liquidity in Bangladesh Among the bank-specific factors, bank size ROA, and DEP were shown to have a substantial adverse effect on liquidity, but CAR, was discovered to have a strong negative influence on the liquidity position of Islamic bank in Bangladesh. The growth rate of GDP has an insignificant positive impact on liquidity. The study suggests that bank to manage the excessive liquidity crisis.