Selected Issues Papers

ECB Monetary Policy Passthrough to Bank Interest Rates During Tightening: Republic of Kosovo

By Ezgi O. Ozturk

January 17, 2025

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Ezgi O. Ozturk "ECB Monetary Policy Passthrough to Bank Interest Rates During Tightening: Republic of Kosovo", Selected Issues Papers 2025, 004 (2025), accessed February 11, 2025, https://0-doi-org.library.svsu.edu/10.5089/9798400299162.018

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Summary

This paper analyzes the transmission of ECB policy rate changes to bank interest rates in Kosovo during the 2022-23 tightening cycle. While both lending and deposit rates increased, the passthrough was more limited compared to the euro area and regional peers. Three key factors explain this limited transmission: Kosovo's stage of financial development, high banking sector liquidity, and significant bank concentration.

Subject: Central bank policy rate, Deposit rates, Financial inclusion, Financial markets, Financial sector development, Financial services, Inflation, Prices

Keywords: Banking sector, Central bank policy rate, Deposit rates, ECB monetary policy Passthrough, ECB policy rate change, ECB policy rate Passthrough, ECB Policy rate pass-through, Euroization, Europe, Financial development, Financial inclusion, Financial sector development, Inflation, Interest rates, Kosovo, Monetary policy transmission

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