Interest Rate Spreads in English-Speaking African Countries

Author/Editor:

Joe Crowley

Publication Date:

April 1, 2007

Electronic Access:

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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 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.

Series:

Working Paper No. 2007/101

Subject:

Banking Commercial banks Deposit rates Inflation Personal income

English

Publication Date:

April 1, 2007

ISBN/ISSN:

9781451866650/1018-5941

Stock No:

WPIEA2007101

Pages:

34

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