Monetary policy and bank lending in developing countries: loan applications, rates, and real effects
Ronnie K. Alinda,
Jose-Luis Peydro () and
Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
Recent studies of monetary policy in developing countries document a weak bank lending channel based on aggregate data. In this paper, we bring new evidence using Ugandaâ€™s supervisory credit register, with microdata on loan applications, volumes and rates, coupled with unanticipated variation in monetary policy. We show that a monetary contraction reduces bank credit supplyâ€”increasing loan application rejections and tightening loan volume and ratesâ€”especially for banks with more leverage and sovereign debt exposure. There are associated spillovers on inflation and economic activityâ€”including construction permits and tradeâ€”and even social unrest.
Keywords: Bank lending channel of monetary policy; bank credit; real effects; credit register; developing countries (search for similar items in EconPapers)
JEL-codes: E42 E44 E52 E58 G21 G28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-fdg, nep-mac and nep-mon
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Journal Article: Monetary policy and bank lending in developing countries: Loan applications, rates, and real effects (2019)
Journal Article: Monetary Policy and Bank Lending in Developing Countries: Loan Applications, Rates, and Real Effects (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1703
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