ECB Monetary Policy Passthrough to Bank Interest Rates During Tightening: Republic of Kosovo
Selected Issues Papers, January 17, 2025
Source details
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- ECB Monetary Policy Passthrough to Bank Interest Rates During Tightening: Republic of Kosovo
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Bibliographic details
- Authors: Ezgi O. Ozturk
- Published: January 17, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798400299162.018
Summary
- This paper analyzes the transmission of ECB policy rate changes to bank interest rates in Kosovo during the 2022-23 tightening cycle.
- While both lending and deposit rates increased, the passthrough was more limited compared to the euro area and regional peers.
- Three key factors explain this limited transmission: Kosovo's stage of financial development, high banking sector liquidity, and significant bank concentration.
Key findings
- Lending and deposit rates in Kosovo increased during the 2022-23 tightening cycle.
- The degree of passthrough of ECB policy rate changes to bank interest rates in Kosovo was more limited than in the euro area and regional peers.
Explanatory factors (as identified in the paper)
- Kosovo's stage of financial development.
- High banking sector liquidity.
- Significant bank concentration.
Subjects and keywords
- Subject: Central bank policy rate, Deposit rates, Financial inclusion, Financial markets, Financial sector development, Financial services, Inflation, Prices
- Keywords: banking sector, Central bank policy rate, Deposit rates, ECB monetary policy Passthrough, ECB policy rate change, ECB Policy rate pass-through, ECB policy rate Passthrough, euroization, Europe, financial development, Financial inclusion, Financial sector development, Inflation, interest rates, Kosovo, Monetary policy transmission
ECB Monetary Policy Passthrough to Bank Interest Rates During Tightening: Republic of Kosovo, Selected Issues Papers, Ezgi O. Ozturk, January 17, 2025.
Content in this bundle
- Sipea2025004