UID:
edocfu_9958098690702883
Format:
1 online resource (37 p.)
ISBN:
1-4639-9472-9
,
1-4639-9078-2
,
1-283-56598-6
,
9786613878434
,
1-4639-7045-5
Series Statement:
IMF Working Papers
Content:
Several Central American (CADR) central banks with independent monetary policies have adopted policy interest rates as their main instrument to signal their monetary policy stances, often in the context of adopting or transitioning to inflation targeting regimes. This paper finds that the interest-rate transmission mechanism, or the pass-through of the policy rate to market rates, is generally weaker and slower in CADR than in the LA6, the countries selected as benchmarks. A variety of potential factors behind this finding are examined, including the degrees of financial dollarization, exchange rate flexibility, bank concentration, financial sector development, and fiscal dominance. Through panel data analysis, the study suggests that the transmission mechanism can be strengthened by increasing exchange rate flexibility, and, over time, by adopting measures towards reducing financial dollarization, developing the financial sector, and reducing bank concentration.
Note:
Description based upon print version of record.
,
Cover Page; Title Page; Copyright Page; Abstract; Contents; I. Introduction; II. Determinants of Interest-Rate Transmission: Literature Review; III. Interest-Rate Transmission in CADR; A. Correlations of the Policy Rate with Market Rates; 1. Monetary and Exchange Rate Frameworks in CADR and LA6; 2. Short and Long-Term Correlations Between Policy Rate and Bank Lending/Deposit Rates; 1. Pass-Through of the Policy Rate to Market Rates in Latin America; 2. CADR + LA6: Policy to Lending Pass-through Cumulative Response Over Time; B. Interest-Rate Transmission: Empirical Evidence
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3. Marginal Effects of Explanatory Variables on the Policy Rate Pass-Through3. Estimation Results; 4. Summary Means and Predicted Pass-Through: 2004-10; IV. Conclusion; 1. Data Information and Sources for Pass-through Estimates and Determinants in Latin America; 2. Pannel Regression Data Sources; 3. Policy-to-Lending Pass-Through Cumulative Response Over Time; 4. Pannel Regression Data Sources; References; Footnotes
,
English
Additional Edition:
ISBN 1-4639-2322-8
Language:
English
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