Interest Rate Liberalization : Some Lessons From Africa

Author/Editor:

Bart Turtelboom

Publication Date:

December 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper undertakes a survey of theoretical considerations and an analysis of the experience of five African countries with interest rate liberalization. Despite substantial progress in monetary policy reforms, liberalization has only partially affected the level and variability of interest rates. Several factors—macroeconomic instability, oligopolistic financial markets, the absence of developed capital markets, as well as the sequencing of the liberalization programs and the asymmetric availability of information—explain the increase in the spread between lending and deposit rates as well as the rather inflexible pattern of interest rates during the transition to a market-based financial system.

Series:

Working Paper No. 91/121

Subject:

English

Publication Date:

December 1, 1991

ISBN/ISSN:

9781451939187/1018-5941

Stock No:

WPIEA1211991

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

46

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