Dynamic analysis of economic factors affecting interest rates in Iran: Evidence from the post-Corona era

اقتصاد پولی مالی

Articles in Press, Accepted Manuscript, Available Online from 29 December 2024

Document Type: Original Article

DOI: 10.22067/mfe.2024.90501.1464

Authors

Bahare Bazargan¹; ali cheshomi^{* 2}; mahdi khodaparast³

¹Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad

²Ferdowsi University of Mashhad

³Department of Economics of Faculty of Economics and Administrative sciences, Mas

Abstract

The interest rate is an important indicator for the economy that is affected by economic factors. Macroeconomic factors that reflect the state of the economy are important for the behavior of interest rates. In addition, major global shocks such as COVID-19 can also affect interest rates. Therefore, the aim of this study is to investigate the short-term and long-term effects of economic factors on the interbank interest rate in Iran with monthly data from March 2018 to March 2024 with the ARDL approach since the beginning of the epidemic and the period after that. Experimental findings showed that the exchange rate and oil price have a positive and significant effect on the interest rate in the long term during the corona and post-corona outbreak. The results show a negative and significant relationship between the consumer price index and the interest rate in the long term. In addition, the results indicate that there was no statistically significant relationship between GDP and liquidity with interest rates in the post-Corona era. The policy implications of this study provide important findings about the factors influencing interest rates in crisis situations.

Keywords

interbank interest rate; consumer price index; COVID-19; economic growth

References