Interest Rate PassThrough in Malawi: Implications for Effectiveness of Monetary Policy

Austin Chiumia and Arnold Palamuleni

Working Papers from African Economic Research Consortium

Abstract: This study investigated the interest rate pass-through and its implications for monetary policy effectiveness in Malawi. Using the cost-of-funds approach and monthly data from 2009 to 2015, an autoregressive distributed lag model was estimated. Results suggest that the structure of the banking industry (banking environment) matters. Also, market power is important in understanding the resulting variation in the savings and lending rates across banks in the market as well as the transmission of monetary policy impulses. Overall, our findings suggest that short-term rates as operating target are consistent with inflation targeting as a monetary policy objective.

Date: 2020-08-05
Note: African Economic Research Consortium
References: Add references at CitEc
Citations:

Downloads: (external link)
https://publication.aercafricalibrary.org/handle/123456789/1344 (application/pdf)

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:aer:wpaper:251a8538-9eab-40e5-8dd7-c82563bcf431

Access Statistics for this paper

More papers in Working Papers from African Economic Research Consortium Contact information at EDIRC.
Bibliographic data for series maintained by Daniel Njiru ().