Highlights
This paper evaluates and quantifies the short-term impact of the COVID-19 pandemic on stock markets performance in Africa.
We employ a novel Bayesian structural time series approach.
Stock markets performance in Africa have significantly reduced during and after the occurrence of the COVID-19, usually between -2.7 % and -20 %.
The COVID-19 pandemic has restrictive effects on stock markets performance in African economies.
PurposeThis paper seeks to examine the effect of monetary policy rate (MPR) on the lending rates of commercial banks in Ghana.Design/methodology/approachThe paper employed the autoregressive distributed lag (ARDL) model as well as the non-linear autoregressive distributed lag (NARDL) model econometric techniques on a quarterly time series data from 2002 to 2018.FindingsThe ARDL results revealed that, MPR has a positive and significant effect on lending rate in the long and short run. Although there exists a direct relationship between MPR and lending rate, from the NARDL revealed an asymmetric effect of MPR on lending rate to the effect that, lending rate in Ghana responds more to positive shock (a rise in MPR) compared to a negative shock (a decrease in MPR) both in the long and short run.Originality/valueThe paper contributes to policy and literature in Ghana by providing empirical evidence on the asymmetric effect that MPR has on lending rates in Ghana. The paper recommends among others, the establishment of a rating system of banks according to their monetary policy compliance, where highly rated banks could have for instance a reduction on borrowed reserves from the central bank.
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