Interest Rate Pass-Through in the Common Monetary Area of the SACU Countries

S. Kleimeier, H. Sander*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


We investigate the interest rate pass-through in the four common monetary area (cma) countries of the south african customs union (sacu). We employ an empirical pass-through model that allows for thresholds, asymmetric adjustment, and structural changes. We show that cma bank lending markets exhibit quite some degree of homogenization as the pass-through is often fast and complete. Deposit markets are somewhat more heterogeneous by showing differing degrees of interest rate stickiness and asymmetric adjustment. Policy makers should therefore be concerned about imperfect competition which may be at the heart of the remaining cross-country differences in monetary transmission in the cma.
Original languageEnglish
Pages (from-to)215-229
Number of pages15
JournalSouth African Journal of Economics
Issue number2
Publication statusPublished - 1 Jan 2006

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