What the study found
The study found that bank credit to Morocco's non-financial private sector showed strong short-run inertia, meaning it did not respond significantly to policy-rate changes over the short term. It also found 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. They suggest that the effectiveness of monetary policy depends on prevailing risk conditions and how those conditions interact with prudential frameworks in bank-based emerging financial systems.
What the researchers tested
The researchers analyzed monthly data from 2006 to 2023 for bank credit granted to the non-financial private sector in Morocco. They used an autoregressive distributed lag and error-correction model (ARDL-ECM), which separates short-run credit movements from long-run adjustment, and they accounted for possible structural breaks.
What worked and what didn't
Changes in the policy rate did not have a statistically significant short-run effect on bank credit. The bounds test supported a stable long-run equilibrium relationship in credit, but the study did not identify significant long-run effects from monetary policy or credit risk variables; instead, short-run adjustment mechanisms, especially credit risk and balance-sheet allocation, appeared to drive the dynamics.
What to keep in mind
The summary does not provide detailed limitations beyond the study's focus on Morocco and the 2006–2023 period. The results are specific to a bank-dominated emerging economy and to the variables and model used in the analysis.
Key points
- Monthly data from Morocco covering 2006–2023 were analyzed.
- The policy rate was not a statistically significant short-run driver of bank credit.
- A stable long-run equilibrium 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 appeared to be driven mainly by short-run adjustment, credit risk, and balance-sheet allocation.
Disclosure
- Research title:
- Policy rate changes did not significantly affect bank credit in Morocco
- Authors:
- Adil Boutfssi, Youssef Zizi, Tarik QUAMAR
- Institutions:
- Sidi Mohamed Ben Abdellah University, University of Hassan II Casablanca, University of Hassan II Casablanca
- Publication date:
- 2026-03-06
- DOI:
- 10.3390/jrfm19030195
- OpenAlex record:
- View
- Image credit:
- , Wikimedia Commons, CC0
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