IDEAS home Printed from https://ideas.repec.org/p/gii/giihei/heidwp10-2024.html
   My bibliography  Save this paper

Interest Rate Pass-through under a Currency Board Regime: Evidence from Bosnia & Herzegovina

Author

Listed:
  • Emina Milišić

    (Central Bank of Bosnia and Herzegovina)

  • Emina Žunić Dželihodžić

    (Central Bank of Bosnia and Herzegovina)

Abstract

This paper examines the pass-through of European Central Bank (ECB) monetary policy to deposit rates in Bosnia and Herzegovina (B&H). We use aggregate and bank-level data to study interest rate pass-through by bank size and ownership for the period 2012-2023. In extensions, we also study pass-through by counterparty and maturity of deposit contracts. Our results suggest that average pass-through is slow and incomplete. We document that pass-through is faster and more complete for banks which are small and foreign-owned, as compared to banks which are large (and foreign-owned), or banks which are small and domestic. This finding suggests that pass-through depends both on domestic market power of banks as well as their access to foreign money markets.

Suggested Citation

  • Emina Milišić & Emina Žunić Dželihodžić, 2024. "Interest Rate Pass-through under a Currency Board Regime: Evidence from Bosnia & Herzegovina," IHEID Working Papers 10-2024, Economics Section, The Graduate Institute of International Studies.
    • Handle: RePEc:gii:giihei:heidwp10-2024
    as

    Download full text from publisher

    File URL: http://repec.graduateinstitute.ch/pdfs/Working_papers/HEIDWP10-2024.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    monetary policy; transmission mechanism; deposit rates; currency board;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • 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
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:gii:giihei:heidwp10-2024. 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: Dorina Dobre (email available below). General contact details of provider: https://edirc.repec.org/data/ieheich.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.