## Interest Rate Pass-Through in Cabo Verde

_Selected Issues Papers, March 10, 2026_

## Source details

**Canonical URL:** [Interest Rate Pass-Through in Cabo Verde](https://www.imf.org/en/publications/selected-issues-papers/issues/2026/03/10/interest-rate-pass-through-in-cabo-verde-574552)

## Other formats

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## Bibliographic details
- Authors: Bruno Albuquerque, Nombulelo Gumata
- Published: March 10, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229040297.018

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### Key findings
- Using monthly data since 2001, the paper estimates a limited pass-through of monetary policy to banks’ lending rates.
- A 1-percentage-point policy rate change leads to:
  - 0.19–0.28 increase in average lending rates.
  - 0.13–0.23 increase in long-term rates.
- Pass-through is roughly twice as strong during tightening than easing cycles but remains weak overall.
- The pass-through remains weak in the current cycle started in May 2023, underscoring challenges for monetary policy transmission.

### Data and empirical scope
- Frequency: monthly data.
- Sample start: since 2001.
- Timeframe relevance: includes the current monetary cycle started in May 2023.

### Policy and transmission implications
- Limited pass-through implies weaker monetary policy transmission from the central bank policy rate to bank lending rates.
- Asymmetric response: tightening cycles generate roughly twice the pass-through of easing cycles, suggesting differential transmission depending on policy direction.
- The weak overall pass-through, including in the current cycle, highlights challenges for achieving monetary policy goals via interest rate adjustments.

### Subjects and keywords (as categorized in the source)
- Subjects: Asset and liability management, Bank credit, Central bank policy rate, Commercial banks, Domestic systemically important banks, Excess liquidity, Financial institutions, Financial services, Interest rate policy, Monetary policy, Money.
- Keywords: Bank credit, BCV interest rate, Cabo Verde, Central bank policy rate, Commercial banks, Domestic systemically important banks, Excess liquidity, Global, IMF country, IMF staff, interest rate channel, interest rate pass-through, Interest rate policy, monetary policy transmission, tightening cycle.

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## Content in this bundle

- **Interest Rate Pass-Through in Cabo Verde; IMF Selected Issues Paper No. 2026/019; January 9, 2026**
  - [Interest Rate Pass-Through in Cabo Verde; IMF Selected Issues Paper No. 2026/019; January 9, 2026 (Markdown version)](/-/media/files/publications/selected-issues-papers/2026/english/sipea2026019.pdf.md){rel="alternate" type="text/markdown"}
  - [Interest Rate Pass-Through in Cabo Verde; IMF Selected Issues Paper No. 2026/019; January 9, 2026 (PDF)](/-/media/files/publications/selected-issues-papers/2026/english/sipea2026019.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/03/10/interest-rate-pass-through-in-cabo-verde-574552_