Open AccessNew evidence on credit channel of monetary policy transmission in India
Author(s) -
Mohammad Farajnezhad,
Durrishah Idrus,
Mani Shehni Karam Zadeh
Publication year - 2022
Language(s) - English
DOI - 10.55670/fpll.futech.1.1.3
Subject(s) - market liquidity , loan , monetary economics , inflation (cosmology) , monetary policy , economics , channel (broadcasting) , interest rate channel , interest rate , credit risk , financial system , credit channel , business , finance , inflation targeting , engineering , physics , electrical engineering , theoretical physics
This article examines a credit channel of the monetary policy transmission mechanism in India. One hundred thirty-two commercial banks in India were studied for ten years, from 2009 to 2018, using STATA for data analysis. The question of this study is: do bank features and macroeconomic variables combine to influence credit supply in India? According to the data, the bank's features have a large and negative liquidity ratio compared to the loan amount. Furthermore, there is a significant but negative relationship between the interaction of inflation and interest rates with the liquidity ratio and loan amount in India.