Transmission of the key interest rates in the czech ekonomy

The presented study is an empirical investigation of interest rates transmission on the Czech financial market. Transmission was simulated by means of VAR model, built up to evaluate an impact of impuls change of one interest rate on the behaviour of the others in the given sample. The study shows that transmission from repo rates through PRIBORs to the yields on treasury bills can be determined. Next, transmission from repo rates to short interbank rates was proven as an important channel used by the Czech National Bank to stabilize unfavourable development on the money market in the middle 1997.