Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Monetary Policy Transmission in Oman PDF full book. Access full book title Monetary Policy Transmission in Oman by Thomas Kroen. Download full books in PDF and EPUB format.
Author: Thomas Kroen Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 9
Book Description
Amid a pegged exchange rate to the US dollar and an open capital account, Oman’s policy rates move closely with US monetary policy. In this analysis, we show empirically that transmission from policy rates into effective lending and deposit rates remains subdued in Oman, even compared to GCC peers that similarly face a high oil price environment with persistent excess liquidity in the banking system. A cap on personal loan rates and low exposure of banks to SMEs and riskier borrowers limit passthrough into effective lending rates and credit conditions. The note documents ongoing actions by Omani policymakers to strengthen transmission and provides further recommendations on liquidity management, reserve management, and relaxing the interest rate cap.
Author: Thomas Kroen Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 9
Book Description
Amid a pegged exchange rate to the US dollar and an open capital account, Oman’s policy rates move closely with US monetary policy. In this analysis, we show empirically that transmission from policy rates into effective lending and deposit rates remains subdued in Oman, even compared to GCC peers that similarly face a high oil price environment with persistent excess liquidity in the banking system. A cap on personal loan rates and low exposure of banks to SMEs and riskier borrowers limit passthrough into effective lending rates and credit conditions. The note documents ongoing actions by Omani policymakers to strengthen transmission and provides further recommendations on liquidity management, reserve management, and relaxing the interest rate cap.
Author: Mr.Raphael A. Espinoza Publisher: International Monetary Fund ISBN: 1475505094 Category : Business & Economics Languages : en Pages : 53
Book Description
The GCC countries maintain a policy of open capital accounts and a pegged (or nearly-pegged) exchange rate, thereby reducing their freedom to run an independent monetary policy. This paper shows, however, that the pass-through of policy rates to retail rates is on the low side, reflecting the shallowness of money markets and the manner in which GCC central banks operate. In addition to policy rates, the GCC monetary authorities use reserve requirements, loan-to-deposit ratios, and other macroprudential tools to affect liquidity and credit. Nonetheless, a panel vector auto regression model suggests that U.S. monetary policy has a strong and statistically significant impact on broad money, non-oil activity, and inflation in the GCC region. Unanticipated shocks to broad money also affect prices but do not stimulate growth. Continued efforts to develop the domestic financial markets will increase interest rate pass-through and strengthen monetary policy transmission.
Author: International Monetary Fund. Middle East and Central Asia Dept. Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 53
Author: Thomas Kroen Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 19
Book Description
Underpinned by Vision 2040, Oman aims to reduce its economic reliance on the hydrocarbon sector by diversifying its economy. Reforms are targeted to develop a well-diversified, private-led, sustainable, and inclusive economy where innovation and knowledge play a more prominent role. This requires the existence of a well-developed, inclusive, and stable financial sector that can navigate the country’s transformation and fund the new economy. As the economic transformation gains traction and entrepreneurship and innovation take center stage, Oman’s financial sector will face a more complex environment where it needs to develop innovative financial and risk management solutions to cater for the emerging and expanding financial needs of the different players in the economy. Against this background, this note provides an assessment of the development of Oman’s financial sector, identifies areas for potential improvement, and proposes policy actions to foster further financial development and inclusion.
Author: Mr.Luis Brandao-Marques Publisher: International Monetary Fund ISBN: 1513529730 Category : Business & Economics Languages : en Pages : 54
Book Description
Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.
Author: Mr.Serhan Cevik Publisher: International Monetary Fund ISBN: 1475505396 Category : Business & Economics Languages : en Pages : 35
Book Description
This paper empirically investigates the effectiveness of monetary policy transmission in the Gulf Cooperation Council (GCC) countries using a structural vector autoregressive model. The results indicate that the interest rate and bank lending channels are relatively effective in influencing non-hydrocarbon output and consumer prices, while the exchange rate channel does not appear to play an important role as a monetary transmission mechanism because of the pegged exchange rate regimes. The empirical analysis suggests that policy measures and structural reforms - strengthening financial intermediation and facilitating the development of liquid domestic capital markets - would advance the effectiveness of monetary transmission mechanisms in the GCC countries.
Author: International Monetary Publisher: International Monetary Fund ISBN: 1513596020 Category : Business & Economics Languages : en Pages : 93
Book Description
Sultan Haitham ascended to the throne in January 2020 and has committed to implementing strong fiscal and structural reforms to address longstanding vulnerabilities. In addition to persistent fiscal deficits arising from incomplete adjustment to lower oil prices since 2015, Oman faced twin shocks from the COVID-19 pandemic and a collapse in oil prices in 2020 that amplified fiscal and external vulnerabilities. The authorities moved rapidly to contain the spread of COVID-19 infections and provided broad-based policy measures to limit its impact on the economy. In addition, frontloaded fiscal consolidation has been implemented in the 2021 budget as part of the authorities’ Medium-Term Fiscal Plan (MTFP) which aims to eliminate the fiscal deficit over the medium term. Banks have high capital buffers and liquidity, but credit risk is a concern going forward. Structural reforms have been accelerated under Oman Vision 2040 to boost non-oil private sector growth and facilitate job creation.
Author: Mr.Adolfo Barajas Publisher: International Monetary Fund ISBN: 1513531239 Category : Business & Economics Languages : en Pages : 41
Book Description
Despite welfare and poverty-reducing benefits for recipient households, remittance inflows have been shown to entail macroeconomic challenges; producing Dutch Disease-type effects through their upward (appreciation) pressure on real exchange rates, reducing the quality of institutions, delaying fiscal adjustment, and ultimately having an indeterminate effect on long-run growth. The paper explores an additional challenge, for monetary policy. Although they expand bank balance sheets, providing a stable flow of interest-insensitive funding, remittances tend to increase banks’ holdings of liquid assets. This both reduces the need for an interbank market and severs the link between the policy rate and banks’ marginal costs of funds, thus shutting down a major transmission channel. We develop a stylized model based on asymmetric information and a lack of transparent borrowers and undertake econometric analysis providing evidence that increased remittance inflows are associated with a weaker transmission. As independent monetary policy becomes impaired, this result is consistent with earlier findings that recipient countries tend to favor fixed exchange rate regimes.
Author: Ms.Sanchita Mukherjee Publisher: International Monetary Fund ISBN: 1463921292 Category : Business & Economics Languages : en Pages : 29
Book Description
In this paper we empirically examine the operation of the traditional Keynesian interest rate channel of the monetary policy transmission mechanism in five potential inflation targeting economies in the MENA region and compare it with fourteen inflation targeting (IT) emerging market economies (EMEs) using panel data analysis. Contrary to some existing studies, our empirical results suggest that private consumption and investment in both groups of countries are sensitive to movements in real interest rates. Moreover, we find that the adoption of IT did not significantly alter the operation of the interest rate channel in IT EMEs. Also, the interest rate elasticities of private consumption and private investment vary with the level of development of the domestic financial market. Finally, capital account liberalization have opposite effects on private consumption and private investment in the two groups of countries.
Author: Thomas Kroen
Author: Thomas Kroen
Author: Mr.Raphael A. Espinoza
Author: International Monetary Fund. Middle East and Central Asia Dept.
Author: Thomas Kroen
Author: Mr.Luis Brandao-Marques
Author: Mr.Serhan Cevik
Author: International Monetary
Author: International Monetary
Author: Mr.Adolfo Barajas
Author: Ms.Sanchita Mukherjee