The Determinants of adjustment speed of commercial banks' lending rates in BURKINA FASO
DOI:
https://doi.org/10.59051/joaf.v13i1.562Keywords:
Interest rate, Adjustment speed, Monetary policy, ARDL modelAbstract
Objective: This paper analyzes the main determinants of the speed of adjustment of commercial banks' lending rates in Burkina Faso.
Methodology: An econometric method based on the cointegration technique and the estimation of an error-correction Autoregressive Distributed Lag (ARDL) model was adopted. The sample consists of 73 observations (from September 2010 to September 2016).
Results: The results show that, on the one hand, the speed of adjustment of lending rates (32.63%) is slow in Burkina and, on the other hand, the rate of injection of liquidity through tenders and inflation are the main determinants of this speed of adjustment of lending rates, while in the short term it is the operating costs and the volatility of rates.
Originality/relevance: The interest of this research lies in the fact that a good understanding of the mechanisms of interest rate transmission implies a greater effectiveness of monetary policy in the real sector. Moreover, the specific case of Burkina Faso is studied with a better adapted econometric methodology. This has allowed us to recommend the creation of a favorable regulatory environment, capable of stimulating commercial banks' lending rates downwards in order to facilitate access to credit.
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