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Market Interest Rate Dynamics in Times of Financial Turmoil

Author

Listed:
  • Juan Sebastián Becerra C.
  • Luis Ceballos S.
  • Felipe Córdova F.
  • Michael Pedersen

Abstract

The significant reduction of the monetary policy rate (MPR) during 2009 has offset the rise in lending rates caused by increased uncertainty in the country and abroad. This paper comes to this conclusion after examining the evolution of interest rates of consumer and commercial loans in order to distinguish between the effects caused by MPR transmission from those caused by the increases in risk premiums occurred in 2008. The above is done through counterfactual simulations using the relevant variables.

Suggested Citation

  • Juan Sebastián Becerra C. & Luis Ceballos S. & Felipe Córdova F. & Michael Pedersen, 2010. "Market Interest Rate Dynamics in Times of Financial Turmoil," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 13(1), pages 5-22, April.
  • Handle: RePEc:chb:bcchec:v:13:y:2010:i:1:p:5-22
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    Cited by:

    1. Juan Francisco Martínez & Daniel Oda & Gonzalo Marivil, 2022. "Pass-through from monetary policy to bank interest rates: A-symmetry analysis," Working Papers Central Bank of Chile 944, Central Bank of Chile.

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