Monetary Policy Transmission in Ghana: Does the Interest Rate Channel Work?
Electronic Access:
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Summary:
This paper analyzes interest rate pass-through in Ghana. Time series and bank-specific data are utilized to highlight linkages between policy, wholesale market, and retail market interest rates. Our analysis shows that responses to changes in the policy interest rate are gradual in the wholesale market. Prolonged deviation in the interbank interest rate from the prime rate illustrate the challenges the Bank of Ghana faces when targeting a short-term money market interest rate. Asymmetries in the wholesale market adjustment possibly relate to monetary policy signaling, weak policy credibility, and liquidity management. In the retail market, pass-through to deposit and lending interest rates is protracted and incomplete.1
Series:
Working Paper No. 2011/275
Subject:
Banking Central bank policy rate Deposit rates Financial institutions Financial services Interbank rates Market interest rates Treasury bills and bonds
English
Publication Date:
November 1, 2011
ISBN/ISSN:
9781463925314/1018-5941
Stock No:
WPIEA2011275
Pages:
32
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