Investigating the Relationship between the Facility Interest Rate and the Bank Deposit Interest Rate in Iran
Journal Title: Advances in Mathematical Finance and Applications - Year 2018, Vol 3, Issue 4
Abstract
The facility interest rate is one of the most important macroeconomic variables. The bank facility interest rate is associated with other macro-economic variables, one of which is the bank deposit interest rate. Using the time series data of the 1973-2017 period and the simultaneous equation system, the researchers estimated four equations using the three-stage least squares method.The result of estimation of the first equation indicates that there is a significant positive relationship between the bank deposit interest rate and the facility interest rate in the Iranian economy during this 45-year period, in that a decrease in the facility interest rate follows an increase in the inflation rate.The result of estimation of the second equation, in which the deposit interest rate is the dependent variable, shows that there is a significant positive relationship between the facility interest rate and the deposit interest rate.. The result of estimation of the third equation, where the inflation rate is the dependent variable, indicates that there is a significant positive relationship between the liquidity level and the inflation rate,The result of estimation of the last equation where the credit risk of banks is the dependent variable shows that there is a significant positive relationship between the facility interest rate and the credit risk.
Authors and Affiliations
Zahra Haerinasab, Kiomars Sohaili, Shahram Fattahi
Keywords
Related Articles
- EP ID EP461067
- DOI 10.22034/AMFA.2019.579317.1136
- Views 69
- Downloads 0
Studying the Relationship between the Financial Incentives of Board Members and Disclosure of Corporate Risk, Emphasizing the Levels of Corporate Performance and Risk
The study aims to investigate the relationship between the financial incentives of board members and disclosure of corporate risk, emphasizing the levels of corporate performance and risk in Iran. The research sample in...
On Vector Equilibrium Problem with Generalized Pseudomonotonicity
In this paper, first a short history of the notion of equilibrium problem in Economics and Nash$\acute{'}$ game theory is stated. Also the relationship between equilibrium problem among important mathematical problems li...
Inflation, Operating Cycle, Cash Holding
The purpose of this paper is to examine the effects of inflation and operating cycle on cash holding in Tehran Stock Exchange in the period 2010 to 2014.The sample is comprised of 103 companies which are selected by syst...
The Effect of Financial Distress on the Investment Behavior of Companies Listed on Tehran Stock Exchange
The purpose of this study was to determine the effect of financial distress on investment behavior for the years of 2011 to 2016. The statistical population of the research is Tehran Stock Exchange. According to the syst...
Fair Value Accounting for Liabilities and Own Credit Risk
Changes in credit risk may arise when either the value or the risk of corporate assets changes. Changes in the equity value associated with the changes in the asset value and changes in asset risk can be characterized in...