Deposit Rate Pass-Through in Selected Latin American Economies over the Post-2008 World

Abstract

ABSTRACT This investigation documented the following. First, commercial banks in Colombia and Mexico overshot in their lending rate adjustments and practiced predatory pricing in the credit markets. Second, the institutions in Bolivia, Costa Rica, and Honduras were sluggish in their short-run lending rate adjustments and lowered their lending rate more in the long run. Third, Brazilian banks adjusted their lending rates down when their deposit rates increased in the short run, and drastically increased them in the long run. Thus, to promote economic growth and improve the living standard of the populace, these hindrances in Latin American economies must be rectified.