The Time-Varying Pass-Through of the Lending Rate Responses to the Repo Rate Changes and Loan Intermediation Mark-Ups

  • Eliphas Ndou
  • Thabo Mokoena


We find that the interest rate pass-through and the loan intermediation mark-up move in opposite directions. A high (low) mark-up is accompanied by a low (high) interest rate pass-through. The interest rate pass-through coefficient is higher pre-2009M1 and the mark-up is lower pre-2009 compared to other samples. The reduced interest rate pass-through and higher loan intermediation mark-up post-2009 might indicate the role of the risk premium attached to weak and low economic growth and the accompanying instabilities during this period. In addition, the results show that the size of the interest rate pass-through and loan intermediation mark-up differs across the monetary policy tightening and loosening cycles.


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© The Author(s) 2019

Authors and Affiliations

  • Eliphas Ndou
    • 1
    • 3
    • 4
  • Thabo Mokoena
    • 2
  1. 1.Economic Research DepartmentSouth African Reserve BankPretoriaSouth Africa
  2. 2.Department of Economic, Small Business Development, Tourism and Environmental AffairsFree State Provincial GovernmentBloemfonteinSouth Africa
  3. 3.School of Economic and Business SciencesUniversity of the WitwatersrandJohannesburgSouth Africa
  4. 4.Wits Plus, Centre for Part-Time StudiesUniversity of the WitwatersrandJohannesburgSouth Africa

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