Lost in Transmission? The Effectiveness of Monetary Policy Transmission Channels in the GCC Countries

• Author(s): Mr.Serhan Cevik, Ms.Katerina Teksoz,
• Publisher: International Monetary Fund
• Pages: 35
• ISBN_10: 1475505396
  ISBN_13: 9781475505399
  
• Language: en
• Categories: Business & Economics / Foreign Exchange , Business & Economics / Money & Monetary Policy , Business & Economics / Econometrics ,

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.