The Heterogeneous Impact of Monetary Policy Announcements on Firms’ Financial Outcomes

This study examines the impact of monetary policy surprises on credit usage, borrowing costs, default probabilities, and foreign-currency (FX) trading behavior, emphasizing heterogeneity by firm size, leverage, export orientation, and sector. Using a comprehensive administrative dataset linking firm-level balance sheets, employment, firm–bank credit records, and FX transactions, we document four main results: (1) unexpected tightening reduces borrowing, raises loan rates, and increases default risk, with markedly stronger effects for SMEs and highly leveraged firms than for large and less-leveraged firms; (2) export-oriented firms are relatively resilient, consistent with diversified foreign-currency revenues and broader funding options; (3) sectoral responses are uneven—construction is most responsive, services are intermediate, and industry is least affected; and (4) policy surprises reallocate FX flows—following unexpected tightening, firms (especially SMEs and non-exporters) reduce FX purchases and increase FX sales, while exporters adjust less. Collectively, the findings underscore systematic variation in firms’ responses to monetary policy shaped by size, financial structure, export orientation, and sectoral characteristics.