Measuring Natural Interest Rate in Morocco

Chaimae Lazzarou
Additional contact information
Chaimae Lazzarou: Bank Al-Maghrib – Central Bank of Morocco

No 01-2026, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: This paper estimates Morocco's natural interest rate (NIR) using two approaches: a standard HLW-type framework and an augmented specification that incorporates external factors, namely imported inflation, and movements in the real effective exchange rate. The results point to a downward trend in the natural rate following the Global Financial Crisis and an increase during the post pandemic inflationary episode. The REER-augmented model delivers higher estimates than the baseline, particularly in periods of inflationary pressures. On average, the natural interest rate is estimated to stand at around 2.6 percent over the sample period, implying a negative interest rate gap relative to the policy rate.

Keywords: Natural interest rate; Monetary policy; Small open economy; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: C11 E43 E52 F41 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2026-02-05
References: Add references at CitEc
Citations:

Downloads: (external link)
http://repec.graduateinstitute.ch/pdfs/Working_papers/HEIDWP01-2026.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp01-2026

Access Statistics for this paper

More papers in IHEID Working Papers from Economics Section, The Graduate Institute of International Studies Contact information at EDIRC.
Bibliographic data for series maintained by Dorina Dobre ().