Title: Evaluating the Lending Channel of Monetary Transmission in Qatar

Authors: Idries M. Al-Jarrah; Khalid S. Al-Abdulqader; Ra'ed Masa'deh

Addresses: College of Business and Economics, Qatar University, Doha 2713, Qatar ' College of Business and Economics, Qatar University, Doha 2713, Qatar ' Faculty of Business, University of Jordan, Amman 11118, Jordan

Abstract: This study uses OLS, fixed effect and random effect models to evaluate the lending channel of the monetary policy transmission in Qatar over the 2000-2013 period. The growth in the loans extended by the Qatari banks is regressed on the current and lagged values of monetary policy stance, bank liquid assets, deposits, GDP and the lagged values of change in bank lending. The results show that bank lending responds positively but insignificantly to changes in the monetary policy stance. In contrast, the results reveal that bank lending responds to changes in the values of cash and due with banks and customer deposits. These results may indicate lack of a lending channel in Qatar though it may concur with the implicit objective of the Qatari monetary policy of changing the structure of banking system assets and liabilities but not on the account of the target credit in the market.

Keywords: monetary policy; transmission mechanism; bank lending channel; panel data; Qatar.

DOI: 10.1504/IJEPEE.2017.085288

International Journal of Economic Policy in Emerging Economies, 2017 Vol.10 No.2, pp.185 - 199

Received: 07 Oct 2015
Accepted: 17 Oct 2015

Published online: 03 Jul 2017 *

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