What the study found
Changes in the policy rate do not have a statistically significant short-run effect on bank credit in Morocco. The study also finds a stable long-run relationship in credit, but no significant long-run elasticities for monetary policy or credit risk variables.
Why the authors say this matters
The authors conclude that monetary transmission in Morocco appears to work gradually and indirectly, mainly through prudential and balance-sheet channels rather than the conventional interest-rate channel. The findings indicate that the effectiveness of monetary policy depends on prevailing risk conditions and their interaction with prudential frameworks in bank-based emerging financial systems.
What the researchers tested
The researchers studied how monetary policy is transmitted to bank credit granted to the non-financial private sector in Morocco, a bank-dominated emerging economy. They used monthly data from 2006 to 2023 and an ARDL–ECM framework, which separates short-run credit dynamics from long-run adjustment processes, while accounting for possible structural breaks.
What worked and what didn't
The bounds test supported a stable long-run equilibrium relationship in credit. However, no significant long-run elasticities were identified for monetary policy or credit risk variables, and policy-rate changes were not statistically significant in the short run. Instead, credit dynamics appeared to be driven mainly by short-run adjustment mechanisms shaped by credit risk and balance-sheet allocation.
What to keep in mind
The abstract does not describe detailed limitations beyond the scope of the data and framework used. The study is focused on Morocco over 2006–2023 and on bank credit to the non-financial private sector, so the findings are specific to that setting.
Key points
- Policy-rate changes were not statistically significant for bank credit in the short run.
- A stable long-run relationship in credit was supported by the bounds test.
- No significant long-run elasticities were found for monetary policy or credit risk variables.
- Credit dynamics were driven mainly by short-run adjustment mechanisms linked to credit risk and balance-sheet allocation.
- The authors say monetary transmission in Morocco is gradual and indirect, relying more on prudential and balance-sheet channels than on the interest-rate channel.
Disclosure
- Research title:
- Morocco’s bank credit shows short-run inertia, not immediate policy-rate response
- Authors:
- Adil Boutfssi, Youssef Zizi, Tarik QUAMAR
- Institutions:
- University of Hassan II Casablanca, Sidi Mohamed Ben Abdellah University
- Publication date:
- 2026-03-06
- OpenAlex record:
- View
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