02061cas a2200253 a 4500 AALejournalIMF016443 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513584393 1018-5941 BD-DhAAL BD-DhAAL Grigoli, Francesco. Interest Rate Pass-Through in the Dominican Republic / Francesco Grigoli, Jose Mota. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (28 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students A well-functioning monetary transmission mechanism is critical for monetary policy. As the Dominican Republic recently adopted an inflation targeting regime, it is even more relevant to guarantee that changes in the monetary policy rates are quickly and fully reflected in retail rates, to eventually influence aggregate demand and inflation. This paper estimates the interest rate pass-through of the monetary policy rate to retail rates and explores asymmetries in the adjustment. We find evidence of complete pass-through to retail rates, confirming the effectiveness of the monetary policy transmission mechanism. However, our results also suggest a faster pass-through to lending rates than to deposit rates and asymmetric adjustments of short-term rates, as deposit rates respond faster to policy rate cuts and lending rates respond faster to policy rate hikes. Measures to enhance competition in the financial system could help to achieve a symmetric adjustment of retail rates. Mode of access: Internet Mota, Jose. IMF Working Papers; Working Paper ; No. 2015/260 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/260/001.2015.issue-260-en.xml IMF e-Library