Interest Rate Spreads in English-Speaking African Countries
April 1, 2007
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Summary
This paper examines interest rate spreads in English-speaking African countries. Higher spreads were found to be associated with lower inflation, a greater number of banks, and greater public ownership of banks. Higher deposit interest rates were found to be associated with lower interest rate spreads, but higher net interest margins. A large increase in spreads in the late 1980s and 1990s may be explained by a strengthening of financial sector supervision. Limited data suggested that poor governance, weak regulatory frameworks and property rights, and higher required reserve ratios are associated with higher spreads.
Subject: Banking, Commercial banks, Deposit rates, Inflation, Personal income
Keywords: adjusted interest rate, deposit rate, interest income, interest rate spread, lending rate, WP
Pages:
34
Volume:
2007
DOI:
Issue:
101
Series:
Working Paper No. 2007/101
Stock No:
WPIEA2007101
ISBN:
9781451866650
ISSN:
1018-5941
