## 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](https://www.imf.org/en/publications/wp/issues/2016/12/31/monetary-transmission-in-developing-countries-evidence-from-india-44176)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/monetary-transmission-in-developing-countries-evidence-from-india-44176/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/monetary-transmission-in-developing-countries-evidence-from-india-44176/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/monetary-transmission-in-developing-countries-evidence-from-india-44176/bundle-manifest.json)

## Bibliographic details
- Authors: Prachi Mishra, Peter J Montiel, Rajeswari Sengupta
- Published: August 8, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475523966.001

---

### Summary of findings
- 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.

### Methodology
- Approach: conventional structural VAR methodology.

### Policy-relevant themes and variables analyzed
- 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.

### Publication and metadata
- Authors: Prachi Mishra, Peter J Montiel, Rajeswari Sengupta
- Date: August 8, 2016
- Series: Working Paper No. 2016/167
- Issue: 167
- Volume: 2016
- Pages: 68
- DOI: https://doi.org/10.5089/9781475523966.001
- ISBN: 9781475523966
- ISSN: 1018-5941
- Stock No: WPIEA2016167

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

---

## Content in this bundle

- **_wp16167**
  - [_wp16167 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2016/_wp16167.pdf.md){rel="alternate" type="text/markdown"}
  - [_wp16167 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2016/_wp16167.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/monetary-transmission-in-developing-countries-evidence-from-india-44176_