This paper analyzes interest rate pass-through in Ghana. Time series and bank-specific data are utilized to highlight linkages between policy, wholesale market, and retail market interest rates. Our analysis shows that responses to changes in the policy interest rate are gradual in the wholesale market. Prolonged deviation in the interbank interest rate from the prime rate illustrate the challenges the Bank of Ghana faces when targeting a short-term money market interest rate. Asymmetries in the wholesale market adjustment possibly relate to monetary policy signaling, weak policy credibility, and liquidity management. In the retail market, passthrough to deposit and lending interest rates is protracted and incomplete. 1

Money has only limited information value for future inflation in Ghana over a typical monetary policy implementation horizon (four to eight quarters). On the other hand, currency depreciation and demand pressures (as measured by the output gap) are shown to be important predictors of future price changes. Inflation inertia is high and inflation expectations are largely based on backward-looking information, suggesting that inflation expectations are not well anchored and hence more is needed to strengthen the credibility of Ghana's inflation-targeting regime. 1

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This article traces the stages of the Indonesian banking crisis of the late 1990s. Almost every stage of the handling of the crisis was complicated by governance issues. Beyond these, among the lessons identified are how quickly things can get out of hand in an apparently strongly performing economy; that at the outset of a crisis information will be very limited; and that management of a crisis will be an evolving process. A blanket guarantee covering all bank liabilities may be indispensable; however, the authorities are 'buying time', and the more time that has to be bought the more expensive the process will be. Transparency too is indispensable, to generate public trust and support, and to ensure that actions taken by the authorities are irreversible. Overall, while not everything was done right, the strategy put in place had positive elements that have served to protect a core banking system and establish conditions for recovery.

This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.This study examines the appropriateness of alternative intermediate monetary policy targets for Zimbabwe in light of the stability of the demand for money and the information content of financial variables for predicting price level movements. Results of the study indicate that a well-defined long-run demand relation exists for currency in circulation, but not for other monetary aggregates. Currency in circulation has strong information content for predicting future price level movements. The information content of other financial variables, such as the exchange rate and interest rates, is weaker. Statistical relationships break down of the outset of high inflation.