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THE TRANSMISSION MECHANISM OF MONETARY POLICY IN MALAYSIA: THROUGH BANK LOANS OR DEPOSITS?

International Journal of Economics, Management and Accounting

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Title THE TRANSMISSION MECHANISM OF MONETARY POLICY IN MALAYSIA: THROUGH BANK LOANS OR DEPOSITS?
 
Creator Ghazali, Aisyah Abdul Rahman, Noor Azlan; School of Business Management, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, 43600 UKM, Bangi, Selangor, Malaysia (e-mail: nag@pkrisc.cc.ukm.my; eychah@pkrisc.cc.ukm.my)
 
Description We investigate the link between banking activities and macroeconomic performance in Malaysia with respect to the money and credit channel by studying the causal influence of banks’ assets and liabilities. The Granger causality analyses that we performed support the importance of the credit channel within the Malaysian economy. Significant causations are traced running from changes in loans issued by banks to economic variables. Limited evidence is found for the deposits. Parallel to the working of the credit channel, a one-way causation pattern from deposits to loans is identified. Thus, the Central Bank’s policies with respect to the availability of reservable deposits are transmitted to the economy via bank lending activities, supporting the credit channel explanations.JEL classification: E5Key words: Transmission mechanism, Banking, Monetary policy
 
Publisher Kulliyyah of Economics and Management Sciences
 
Contributor —
 
Date 2013-03-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journals.iium.edu.my/enmjournal/index.php/enmj/article/view/107
 
Source International Journal of Economics, Management and Accounting; Vol 13, No 1 (2005)
 
Language eng
 
Relation http://journals.iium.edu.my/enmjournal/index.php/enmj/article/view/107/90