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ECB Monetary Policy Passthrough to Bank Interest Rates During Tightening: Republic of Kosovo
Author:
Ezgi O. Ozturk https://isni.org/isni/0000000404811396 International Monetary Fund

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Series:
Selected Issues Papers
Volume/Issue:
Volume 2025: Issue 004
Language:
English
Publication Date:
17 Jan 2025
DOI:
https://doi.org/10.5089/9798400299162.018
ISBN:
9798400299162
ISSN:
2958-7875
Pages:
12
Keywords:
Monetary policy transmission; interest rates; banking sector; euroization; financial development; Kosovo; ECB monetary policy Passthrough; ECB policy rate change; ECB policy rate Passthrough; ECB Policy rate pass-through; Central bank policy rate; Deposit rates; Financial sector development; Inflation; Financial inclusion; Europe
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IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries. It is based on the information available at the time it was completed.
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This paper analyzes the transmission of ECB policy rate changes to bank interest rates in Kosovo during the 2022-23 tightening cycle. While both lending and deposit rates increased, the passthrough was more limited compared to the euro area and regional peers. Three key factors explain this limited transmission: Kosovo's stage of financial development, high banking sector liquidity, and significant bank concentration.
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Cover Selected Issues Papers
Selected Issues Papers
Publisher:
International Monetary Fund