دراسات اقتصادية
Volume 12, Numéro 1, Pages 312-330
2025-06-01

Analyzing The Role Of Monetary Policy In Ensuring Monetary Stability In Algeria: An Empirical Study

Authors : Bouziane Mohammed . Ayache Zoubeir .

Abstract

This study aims to analyze the impact of monetary policy on the stability of money supply in Algeria during the period 2010-2021 using Principal Component Analysis (PCA). The analysis results indicate that two main factors explain most of the variations in the studied variables: the first factor is associated with liquidity and macroeconomic conditions, while the second factor is more closely linked to inflation and economic growth. The study also concludes that Algeria’s monetary policy has been affected by an imbalance in its instruments, where expansionary policies have contributed to rising inflation and weak economic growth. Therefore, adopting more balanced monetary strategies is necessary to ensure macroeconomic stability and enhance the effectiveness of monetary policy tools.

Keywords

Monetary policy, money supply, principal component analysis, economic stability.