Interest Rate Spreads in English-Speaking African Countries

Joe Crowley

No 2007/101, IMF Working Papers from International Monetary Fund

Abstract: This paper examines interest rate spreads in English-speaking African countries. Higher spreads were found to be associated with lower inflation, a greater number of banks, and greater public ownership of banks. Higher deposit interest rates were found to be associated with lower interest rate spreads, but higher net interest margins. A large increase in spreads in the late 1980s and 1990s may be explained by a strengthening of financial sector supervision. Limited data suggested that poor governance, weak regulatory frameworks and property rights, and higher required reserve ratios are associated with higher spreads.

Keywords: WP; interest income; lending rate; adjusted interest rate; interest rate spread; deposit rate (search for similar items in EconPapers)
Pages: 34
Date: 2007-04-01
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Citations: View citations in EconPapers (17)

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