{
  "title": "Monetary Policy Transmission to Lending Rates: Evidence from Brazil",
  "publication": "IMF Working Papers, July 25, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2025/07/25/monetary-policy-transmission-to-lending-rates-evidence-from-brazil-568783",
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  "summary": "This paper estimates the strength of monetary policy transmission to bank lending rates in Brazil. We identify monetary policy shocks using forecast errors from Brazi’s daily Focus survey of professional forecasters.",
  "sections": [
    {
      "heading": "Summary and purpose",
      "content": "- Estimates the strength of monetary policy transmission to bank lending rates in Brazil.\n- Identifies monetary policy shocks using forecast errors from Brazil’s daily Focus survey of professional forecasters.\n- Uses an instrumental variable application of local projections to estimate pass-through to lending rates."
    },
    {
      "heading": "Main empirical findings",
      "content": "- Aggregate pass-through of 70 percent after four months.\n- Full passthrough to market-based lending rates and 20 percent to government-directed credit interest rates.\n- Bank-level heterogeneity:\n  - 40 percent pass-through for payroll-backed loans.\n  - 80 percent pass-through for working capital loans.\n  - Stronger pass-through for larger banks.\n- Time variation:\n  - Estimated pass-through has increased since 2020 due to more responsive corporate loans."
    },
    {
      "heading": "Methodology (concise)",
      "content": "- Identification of monetary policy shocks: forecast errors from Brazil’s daily Focus survey of professional forecasters.\n- Estimation approach: instrumental variable application of local projections to measure dynamic pass-through to lending rates."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Authors: Daniel Leigh, Rui Xu\n- Date: July 25, 2025\n- Pages: 22\n- Volume: 2025\n- Issue: 152\n- Series: Working Paper No. 2025/152\n- DOI: https://doi.org/10.5089/9798229019002.001\n- Stock No: WPIEA2025152\n- ISBN: 9798229019002\n- ISSN: 1018-5941\n\nSource: IMF Working Papers — \"Monetary Policy Transmission to Lending Rates: Evidence from Brazil\" by Daniel Leigh and Rui Xu (July 25, 2025).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/07/25/monetary-policy-transmission-to-lending-rates-evidence-from-brazil-568783"
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    "Authors: Daniel Leigh, Rui Xu",
    "Published: July 25, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798229019002.001",
    "Estimates the strength of monetary policy transmission to bank lending rates in Brazil.",
    "Identifies monetary policy shocks using forecast errors from Brazil’s daily Focus survey of professional forecasters.",
    "Uses an instrumental variable application of local projections to estimate pass-through to lending rates.",
    "Aggregate pass-through of 70 percent after four months.",
    "Full passthrough to market-based lending rates and 20 percent to government-directed credit interest rates.",
    "Bank-level heterogeneity:",
    "Time variation:",
    "Identification of monetary policy shocks: forecast errors from Brazil’s daily Focus survey of professional forecasters.",
    "Estimation approach: instrumental variable application of local projections to measure dynamic pass-through to lending rates.",
    "Authors: Daniel Leigh, Rui Xu",
    "Date: July 25, 2025",
    "Pages: 22",
    "Volume: 2025",
    "Issue: 152",
    "Series: Working Paper No. 2025/152",
    "DOI: https://doi.org/10.5089/9798229019002.001",
    "Stock No: WPIEA2025152",
    "ISBN: 9798229019002",
    "ISSN: 1018-5941",
    "**Working Paper**"
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