The role of monetary policy response to Covid-19 : the case of algeria

Abstract EN

The main purpose of this paper is to identify and analyse the contribution of monetary policy in mitigating the economic and social effects of the pandemic Covid-19.

The descriptive and analytical methodology is adopted to achieve the objective of this study.

The results showed that one of the most urgent measures adopted by the Central Bank of Algeria (CBA) consists on rescheduling the payment of the due loans for the benefit of businesses directly and highly impacted by the pandemic.

Also, the obligatory reserve ratio was revised at a minimum level beside lowering the leading interest rate by the CBA to increase the bank's lending capacity and reduce the cost of funding for both public and private sector.

In addition, the CBA exempted the banks and the financial institutions from the constitution of a safety cushion and reduced the minimum liquidity ratio.