IDEAS home Printed from https://ideas.repec.org/a/mnb/bullet/v2y2007i2p6-15.html
   My bibliography  Save this article

The theory and practice of interest rate smoothing

Author

Listed:
  • Ágnes Csermely

    (Magyar Nemzeti Bank (central bank of Hungary))

  • András Rezessy

Abstract

The interest rate policy of the Magyar Nemzeti Bank typically consists of taking several smaller steps in one direction. Other central banks follow similar practices. Their interest rate policy actions are characterised by gradual changes: in other words, they avoid sudden, major changes in interest rates and are wary of reversing interest rate cycles too frequently. This study will present the theoretical background of the practice of such interest rate smoothing, the motivations of central banks as revealed by their communication, and some important considerations for Hungarian monetary policy.

Suggested Citation

  • Ágnes Csermely & András Rezessy, 2007. "The theory and practice of interest rate smoothing," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 2(2), pages 6-15, November.
    • Handle: RePEc:mnb:bullet:v:2:y:2007:i:2:p:6-15
    as

    Download full text from publisher

    File URL: http://www.mnb.hu/letoltes/csermely-rezessy-en.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yeldan A. Erinc & Kolsuz Gunes & Unuvar Burcu, 2014. "What to Smooth: Rate of Interest or the Foreign Exchange? Turkish Monetary Policy under Turbulent Times," Review of Middle East Economics and Finance, De Gruyter, vol. 10(3), pages 247-261, December.

    More about this item

    Keywords

    interest rate smoothing; base rate; monetary policy.;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    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:mnb:bullet:v:2:y:2007:i:2:p:6-15. 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: Maja Bajcsy (email available below). General contact details of provider: https://edirc.repec.org/data/mnbgvhu.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.