Monetary Policy Under Uncertainty: The Case of COVID-19 Health Crisis in Morocco

Abstract

The COVID-19 health crisis marked the beginning of a series of shocks that are a source of uncertainty that impacts the decision-making process of central banks around the world. The aim of this paper is to analyze the conduct of Morocco's monetary policy in a context of uncertainty, that of the COVID-19 health crisis. The results of our analysis have shown that in a context of uncertainty, the central bank is called upon to increase its communication to better guide the expectations of economic agents and ensure better transmission of the various monetary policy measures to the real economy. In addition, it must show itself to be credible by transmitting clear signals to restore the confidence of economic agents. However, central bank action alone is not enough. Conditions must be met, on the credit supply and credit demand sides, to remedy the structural imbalances that are holding back the competitiveness of our economy and to counter uncertainty.