Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/173701 
Year of Publication: 
2010
Series/Report no.: 
Working Paper No. [2010-03]
Publisher: 
National Bank of the Republic of Macedonia, Skopje
Abstract: 
This paper focuses on investigating the determinants of lending rates and interest rate spreads in Macedonia. In order to quantify the effect of various factors on lending rates and interest rate spreads during the 2001-2009 period, we use panel estimation techniques on a sample of commercial banks in Macedonia. Our results indicate that lending rates are mostly influenced by bank size and market share, and to a somewhat lesser extent by deposit rates and non-performing loans. In addition, policy variables such as the domestic policy rate and the foreign interest rate also appear to be quite important. Furthermore, bank size and market share, as well as the differential between domestic and foreign rates, are the most important factors affecting interest rate spreads, while the effect of other factors is less clear-cut.
Subjects: 
interest rates
banking system
panel estimation
Macedonia
JEL: 
C23
E43
G21
Document Type: 
Working Paper

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