{
  "title": "Monetary Policy in India: Transmission to Bank Interest Rates",
  "publication": "IMF Working Papers, June 23, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/monetary-policy-in-india-transmission-to-bank-interest-rates-43018",
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  "summary": "This paper provides new evidence on the credit channel of monetary policy transmission in India. Using stepwise estimation of vector error correction models, the analysis finds significant, albeit slow, pass-through of policy rate changes to bank interest rates in India.",
  "sections": [
    {
      "heading": "Summary and key findings",
      "content": "- The paper provides new evidence on the credit channel of monetary policy transmission in India.\n- Using stepwise estimation of vector error correction models, the analysis finds significant, albeit slow, pass-through of policy rate changes to bank interest rates in India.\n- There is evidence of asymmetric adjustment to monetary policy: the lending rate adjusts more quickly to monetary tightening than to loosening.\n- The speed of adjustment of deposit and lending rates to changes in the policy rate has increased in recent years."
    },
    {
      "heading": "Methodology",
      "content": "- Analytical approach: stepwise estimation of vector error correction models (VECMs).\n- Focus: pass-through of policy rate changes to bank interest rates and asymmetry in adjustment between tightening and loosening episodes."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subjects: Bank credit, Banking, Central bank policy rate, Deposit rates, Financial services, Money, Prime rates, Repo rates\n- Keywords: adjustment speed, Bank credit, bank interest, Central bank policy rate, correction term, deposit rate, deposit rates, error correction term, India, lending rate, lending rates, Monetary policy transmission, policy rate cut, prime lending rate, Prime rates, Repo rates, reverse repo, speed of adjustment, target rate, WP\n\n---\n\n Content in this bundle\n\n- wp15129\n  - wp15129 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp15129 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/monetary-policy-in-india-transmission-to-bank-interest-rates-43018"
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    "Authors: Sonali Das",
    "Published: June 23, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513598796.001",
    "The paper provides new evidence on the credit channel of monetary policy transmission in India.",
    "Using stepwise estimation of vector error correction models, the analysis finds significant, albeit slow, pass-through of policy rate changes to bank interest rates in India.",
    "There is evidence of asymmetric adjustment to monetary policy: the lending rate adjusts more quickly to monetary tightening than to loosening.",
    "The speed of adjustment of deposit and lending rates to changes in the policy rate has increased in recent years.",
    "Analytical approach: stepwise estimation of vector error correction models (VECMs).",
    "Focus: pass-through of policy rate changes to bank interest rates and asymmetry in adjustment between tightening and loosening episodes.",
    "Subjects: Bank credit, Banking, Central bank policy rate, Deposit rates, Financial services, Money, Prime rates, Repo rates",
    "Keywords: adjustment speed, Bank credit, bank interest, Central bank policy rate, correction term, deposit rate, deposit rates, error correction term, India, lending rate, lending rates, Monetary policy transmission, policy rate cut, prime lending rate, Prime rates, Repo rates, reverse repo, speed of adjustment, target rate, WP",
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