Inflation Targeting Framework and Interest Rates Transmission in Ghana: An Empirical Investigation

Sakyi, Daniel, Osei Mensah, Isaac and Obeng, Samuel Kwabena (2017) Inflation Targeting Framework and Interest Rates Transmission in Ghana: An Empirical Investigation. Journal of African Business, 18 (4). pp. 417-434. ISSN 1522-8916

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Abstract

This paper investigates the long-and short-run rate of transmission of the prime rate to interest rates since the implementation of inflation targeting policy in Ghana. Monthly data covering the period January 2002 to March 2016 is used. The Johansen and Hansen parameter instability cointegration, the FMOLS and DOLS estimation procedures were used. The long-run results show incomplete pass-through of the prime rate to commercial banks’ lending and deposit rates but over pass-through to the 91-day Treasury bill rate. The short-run adjustment shows relatively slow transmission of the prime rate to the respective interest rates. Given the findings, relevant policy suggestions are provided.

Item Type: Article
Uncontrolled Keywords: inflation targeting,interest rates transmission,monetary policy,cointegration,ghana
Faculty \ School: Faculty of Social Sciences > School of Economics
Related URLs:
Depositing User: Pure Connector
Date Deposited: 23 Nov 2017 06:05
Last Modified: 19 Aug 2020 23:58
URI: https://ueaeprints.uea.ac.uk/id/eprint/65549
DOI: 10.1080/15228916.2017.1327299

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