Interest rates best transmit South African monetary policy, say researchers
A working paper, published by the South African Reserve Bank (Sarb), finds that a monetary policy shock is most effectively transmitted through the interest rate channel – with the exchange rate, expectation and credit channels all operating to a lesser extent.
In the paper, Important channels of transmission monetary policy shock in South Africa, authors Nombulelo Gumatay and Eliphas Ndoux of the Sarb and Alain Kabundiz of the University of Johannesburg analyse 165 quarterly variables, observed
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