Monetary Policy Transmission in Financial Markets: The Case of India-Reference-Cited by-同舟云学术

Monetary Policy Transmission in Financial Markets: The Case of India

Published:2021-12-15 Issue: Volume:12 Page:19
ISSN:2581-8104
Container-title:Journal of Business Thought
language:
Short-container-title:JBT

Author:

Chakravarty Suvojit Lahiri

Abstract

<p>The paper looks into the monetary policy transmission across different segments of the financial market in India from May 2011 to March 2018. It studies the effect of two instruments ie, policy rate and a composite index ( score) comprising of quantity instruments and policy rates on the money market, govt. securities market, foreign exchange market and the stock market using VAR analysis. The results show that monetary transmission is fairly quick in the money market and other interest rates of short maturity compared to interest rates of longer maturities. The impact on interest rates is an appreciation for the policy rate but a depreciation followed by an appreciation for the composite index. Lastly the effect of policy rate and composite index on the sensex is negative.</p>

Publisher

Informatics Publishing Limited

Subject

Management, Monitoring, Policy and Law,Geography, Planning and Development

Reference13 articles.

1. Ross, L. Financial Development and Economic Growth. Journal of Economic Literature. 1997; 35(2):686-726.

2. Ray, P and Prabu, E. Financial Development and Monetary Policy Transmission Across Financial Markets: What Do Daily Data tell for India. RBI Working Paper Series. 2013. WPS (DEPR): 04/2013.

3. Vasudevan, A and Menon, K. On Testing of Some Hypothesis Concerning the Transmission Mechanism of Monetary Policy: The Indian Experience. In the book, Money and Banking: Select Research Papers by the Economists of Reserve Bank of India edt. by A Vasudevan , Academic foundation. 1978.

4. Bhoi, BK, and Dhal, SC. Integration of financial markets in India: an empirical evaluation. RBI Occasional Papers. 1998; 19(4):345-80.

5. Financial Markets Integration in India;Jain;Asia - Pacific Development Journal,2005