Interest, credit and liquid assets in Cote d'Ivoire

Abstract

This paper analyses the evolution of demand for bank deposits in Cote d'Ivoire over a period including the CFA Franc devaluation in 1994. Once we have allowed for smooth transitions in the deterministic component of the demand function, the estimated relationship between deposits and income and inflation levels is congruent with traditional theory; income variability is also found to play some role. The impact of interest rates is rather different from in non-CFA countries, however, owing to peculiarities of the Franc Zone's financial system. Copyright 1999 by Oxford University Press.