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Interest rate policies in selected developing countries, 1970-1982 (Английский)

This paper examines the level and structure of interest rates ford the period 1970-82 in ten developing countries: Bangladesh, Kenya, Korea, Morocco, Nigeria, Pakistan, Peru, Thailand, Turkey and Uruguay. In addition, the paper briefly examines the countries' broader financial and economic policies. In most cases, nominal interest rates were controlled by the governments and varied substantially less than inflation during this period. As a result, real interest rates rose (or fell) with declines (or increases) in inflation; hence, highly negative real rates were a direct reflection of high inflation. A simple grouping of nine of the ten sample countries into two categories demonstrates this clearly: the first group (six countries) had low inflation and mildly negative real rates, which averaged within a few percentage points of the corresponding averages for the industrialized countries; and the second group (three countries) had high inflation and highly negative real rates, which averaged ten to twenty-five percentage points below rates in the industrialized countries. The tenth country, Uruguay, switched from the high inflation, highly negative real rate group to a high inflation, highly positive and volatile real rate category about half way through the period, due to a major liberalization, and thus did not fall into either category.

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