VAR test evaluation of the transmission of monetary policy in Morocco

The role played by the banking sector in financing the economy in Morocco, following the reforms in the 1990s to liberalize the banking and financial sector, justifies our study of the transmission channels of monetary policy by its central bank (Bank Al-Maghrib). Our subject concerns the distinction in the relative importance of the credit channel compared to money channel in the propagation of monetary impulses to the economy. We question, following the pioneering work of Bernanke and Blinder (1992) and Ortiz and Barcelo (2010) in particular, the fact that Bank Al-Maghrib to affect the supply of bank credit by manipulating the amount of reserves available for the banking sector. In other words, in addition to the money channel, the credit channel is it also operates in response to a monetary policy shock? To do this, we use a VAR methodology and mobilizing tools such as Granger causality, "the impulse response functions" and the analysis of variance decomposition of forecasting error on quarterly data from 1994 to 2010. Our results suggest an important role to consider the interest rate (money view) compared to that of credit (credit view), despite the rise of the banking sector in financing the economy in Morocco.