IDEAS home Printed from https://ideas.repec.org/a/bla/sajeco/v87y2019i4p515-531.html
   My bibliography  Save this article

Interest Rate Pass‐through in Malawi: Implications for the Effectiveness of Monetary Policy

Author

Listed:
  • Austin Chiumia
  • Arnold Palamuleni

Abstract

This study investigates the interest rate pass‐through in Malawi and its implications on monetary policy effectiveness. Using the cost‐of‐funds approach and monthly data from 2009 to 2015, an autoregressive distributed lag model is fitted. Results show that there is a near complete pass‐through to the lending rate but not the savings rate. The magnitude of the pass‐through is relatively higher under smaller banks. The results suggest that the structure of the banking industry matters. Market power is important in understanding the variation in lending and savings rates across banks. Overall, short‐term rates as operating targets are consistent with inflation targeting in Malawi.

Suggested Citation

  • Austin Chiumia & Arnold Palamuleni, 2019. "Interest Rate Pass‐through in Malawi: Implications for the Effectiveness of Monetary Policy," South African Journal of Economics, Economic Society of South Africa, vol. 87(4), pages 515-531, December.
    • Handle: RePEc:bla:sajeco:v:87:y:2019:i:4:p:515-531
    DOI: 10.1111/saje.12239
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/saje.12239
    Download Restriction: no
    File URL: https://libkey.io/10.1111/saje.12239?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:sajeco:v:87:y:2019:i:4:p:515-531. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/essaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.