Interest Rate Pass-Through In the Common Monetary Area of the SACU Countries
AbstractWe investigate the interest rate pass-through in the four Common Monetary Area (CMA) countries of the South African Customs Union (SACU). We employ an empirical pass-through model that allows for thresholds, asymmetric adjustment, and structural changes. We show that CMA bank lending markets exhibit quite some degree of homogenization as the pass-through is often fast and complete. Deposit markets are somewhat more heterogeneous by showing differing degrees of interest rate stickiness and asymmetric adjustment. Policy makers should therefore be concerned about imperfect competition which may be at the heart of the remaining cross-country differences in monetary transmission in the CMA.
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Bibliographic InfoPaper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 023.
Date of creation: 2006
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Other versions of this item:
- Harald Sander & Stefanie Kleimeier, 2006. "Interest Rate Pass-Through In The Common Monetary Area Of The Sacu Countries," South African Journal of Economics, Economic Society of South Africa, vol. 74(2), pages 215-229, 06.
- NEP-ALL-2006-07-09 (All new papers)
- NEP-EXP-2006-07-09 (Experimental Economics)
- NEP-FMK-2006-07-09 (Financial Markets)
- NEP-MST-2006-07-09 (Market Microstructure)
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