Monetary Policy in India Transmission to Bank Interest Rates

This paper provides new evidence on the credit channel of monetary policy transmission in India. Using stepwise estimation of vector error correction models, the analysis finds significant, albeit slow, pass-through of policy rate changes to bank interest rates in India. There is evidence of asymmet...

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Bibliographic Details
Main Author: Das, Sonali
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2015
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a Monetary Policy in India  |b Transmission to Bank Interest Rates  |c Sonali Das 
260 |a Washington, D.C.  |b International Monetary Fund  |c 2015 
300 |a 33 pages 
651 4 |a India 
653 |a Depository Institutions 
653 |a Interest rates 
653 |a Credit 
653 |a Banks 
653 |a Finance 
653 |a Prime rates 
653 |a Banks and banking 
653 |a Monetary economics 
653 |a Financial services 
653 |a Saving and Capital Investment 
653 |a Monetary Policy, Central Banking, and the Supply of Money and Credit: General 
653 |a Micro Finance Institutions 
653 |a Mortgages 
653 |a Economic Development: Financial Markets 
653 |a Money 
653 |a Deposit rates 
653 |a Repo rates 
653 |a Banks and Banking 
653 |a Bank credit 
653 |a Banking 
653 |a Interest Rates: Determination, Term Structure, and Effects 
653 |a Monetary Policy 
653 |a Money and Monetary Policy 
653 |a Corporate Finance and Governance 
653 |a Central bank policy rate 
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520 |a This paper provides new evidence on the credit channel of monetary policy transmission in India. Using stepwise estimation of vector error correction models, the analysis finds significant, albeit slow, pass-through of policy rate changes to bank interest rates in India. There is evidence of asymmetric adjustment to monetary policy: the lending rate adjusts more quickly to monetary tightening than to loosening. In addition, the speed of adjustment of deposit and lending rates to changes in the policy rate has increased in recent years