Interest rate movement and its impact on bank lending activity

Abstract

The unfavorable situation experienced by the world and particularly Morocco in recent years has weakened the situation of our country. Several measures have been taken by the regulatory authorities to ensure stability and revive the Moroccan economy. They are transmitted through different channels, some of which may be more efficient and faster. Among these actions undertaken, the adoption of a restrictive monetary policy to control the evolution of galloping inflation. Nevertheless, the succession of upward variations in the key rate can have a negative impact on the activity of banks. Hence the importance of analyzing in the context of this article the level of impact of these changes on bank loans and deposits and also on investment and overall production. We seek to verify whether this change in the rate has a negative effect on the level of bank deposits and has repercussions on the volume of loans distributed. Also if this situation impacts private investment and overall production. The realization of this state of the art will confirm or invalidate the hypothesis that we have formulated.

Keywords : Transmission channels ; Policy rate ; Borrowing rate ; Bank credit ; Investment.

JEL Classification : D04, E50, G24, H54, O16.

Paper type : Theoretical Research