Monetary policy transmission in Bangladesh: Exploring the lending channel

Sadia Afrin

Journal of Asian Economics, 2017, vol. 49, issue C, 60-80

Abstract: The monetary policy transmission mechanism of Bangladesh, especially the lending and exchange rate channels remain largely unexplored during the period of market based monetary policy instruments and the managed float exchange rate regime. This paper analyzes these transmission channels and finds that the monetary aggregates targeting framework is still effective in influencing price level. Bank lending plays a non-trivial role, while the exchange rate channel is less effective in the transmission process, suggesting a high degree of intervention in the foreign exchange market. External shocks appear important for the macro aggregates and domestic credit boom appear inflationary, in which the central bank plays a stabilizing role.

Keywords: Credit; Monetary policy; Structural VAR (search for similar items in EconPapers)
JEL-codes: C32 E51 E52 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S104900781630166X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:49:y:2017:i:c:p:60-80

DOI: 10.1016/j.asieco.2016.10.003

Access Statistics for this article

Journal of Asian Economics is currently edited by C. Wiemer

More articles in Journal of Asian Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().