The effect of monetary policy instruments on inflation rate in Algeria

Abstract EN

In this manuscript, was studied the role of monetary policy instruments in controlling inflation in Algeria.

The study adopted interest rate, rediscount rate and cash reserve ratio as proxy for monetary policy instruments and the independent variables.

These were regressed against inflation rate, the dependent variable.

Secondary time series panel data for the period covering 1994 to 2019 were collected from the Central Bank of Algeria and the World Bank Statistical Bulletins.

The study employed multiple regression technique based on E-views 10 computer software to analyze data obtained on the study variables.

Three hypotheses were tested and the null hypotheses and an alternative hypothesis were accepted based on the regression results.

The results obtained are shown that interest rate, and cash reserve ratio had no significant influence on inflation, while rediscount rate had significant influence on inflation.