Monetary Transmission in Developing Countries: Evidence from India

IMF Working Papers, August 8, 2016

Source details

Canonical URL: Monetary Transmission in Developing Countries: Evidence from India

A tightening of monetary policy is associated with a significant increase in bank lending rates.
Conventional effects on the exchange rate were observed, though exchange rate effects are weak.
Pass-through to lending rates is only partial.
No significant effects were found on real output or the inflation rate.
Overall assessment: the message for the effectiveness of monetary transmission in India is mixed, but results for India are more favorable than is often found for other developing countries.

Bank credit, Banking, Central bank policy rate, Exchange rate arrangements, Exchange rates, Financial services, Foreign exchange, Money, Reverse repo rates.
Keywords emphasized in the study: aggregate demand, Bank credit, bank lending, Central and Eastern Europe, Central bank policy rate, contractionary monetary policy, Exchange rate arrangements, Exchange rates, Global, India, interest rate, monetary policy, monetary policy shock, monetary policy variable, reaction function, reverse repo, Reverse repo rates, Taylor-type monetary policy rule, WP.

Monetary Transmission in Developing Countries: Evidence from India, IMF Working Papers (2016) — Prachi Mishra, Peter J Montiel, Rajeswari Sengupta.