cbn statement, 2015-03-10
The argument is that (1) if MPR in the interest rate corridor framework is a signal to players about the desired level of the interbank rate; (2) if the desired interbank rate in the interbank market is expected to impact on aggregate demand and inflation through short term interest rates, then (3) the shrinking of the interbank market in 2013-14 weakened policy effectiveness and efficiency of the market as an allocative and rationing device.
Sentiment: neutral
Topic: mp_interest_rate