ECB Monetary Policy Passthrough to Bank Interest Rates During Tightening: Republic of Kosovo
January 17, 2025
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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.
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
Pages:
12
Volume:
2025
DOI:
Issue:
004
Series:
Selected Issues Paper No. 2025/004
Stock No:
SIPEA2025004
ISBN:
9798400299162
ISSN:
2958-7875
