Hidden Bibliographic Details
| Other authors / contributors: | International Monetary Fund. Middle Eastern Department, issuing body.
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| ISBN: | 1282051032
9781282051034
1451902778
9781451902778
1462317588
9781462317585
1452797625
9781452797625
9786613798480
6613798487
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| ISSN: | 2227-8885
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| Notes: | Includes bibliographical references (pages 22-24).
Restrictions unspecified
Electronic reproduction. [Place of publication not identified] : HathiTrust Digital Library, 2010.
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212
English.
digitized 2010 HathiTrust Digital Library committed to preserve
Print version record.
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| Summary: | In many developing economies interest rates have been strongly influenced, if not controlled, by the government. This in turn has often resulted in a wide gap between deposit and lending rates of interest as a result of measures such as high reserve requirements and other forms of taxes on the commercial banking sector. 2 Such 'taxing' of the domestic financial market (effectively on domestic savings) is motivated by a number of factors, but most important among them is usually the need to raise revenue to finance government spending. Another motive has often been to raise the level of domestic investment, while at the same time promoting the growth of 'priority' sectors through the rationing of credit based on criteria set by the government. Other important factors behind the wide spread between deposit and lending rates of interest in many developing countries are a shortage of viable investment projects with low or moderate risks, and/or an inefficient, largely uncompetitive domestic banking sector. In most cases both administrative and structural factors are important in explaining the lack of financial intermediation and its high cost, but in practice it is difficult to ascertain the relative importance of these two sets of factors.
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| Other form: | Print version: Bhattacharya, Rina. Political economy aspects of trade and financial liberalization. [Washington, D.C.] : International Monetary Fund, Middle Eastern Department, ©1999
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| Standard no.: | 10.5089/9781451902778.001
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