COVID-19, liquidity measures and credit supply in the WAEMU
DOI:
https://doi.org/10.18559/rielf.2024.2.2009Keywords:
COVID-19, bank credits, liquidity injection, WAEMU, BCEAOAbstract
Objective: This article aims to analyse the effect of the COVID-19 pandemic on the dynamics of the supply of bank credit in WAEMU countries.
Design/methodology/approach: Based on monthly panel data from the BCEAO, we conducted a Pooled Means Group (PMG) analysis and FMOLS and DOLS for robustness check.
Results: The results of our statistical and econometric analyses show that COVID-19 has a significantly negative effect on the supply of long-term bank credit in each of the WAEMU countries. Furthermore, the injection of liquidity by the BCEAO coupled with the facilities of lending and crediting rates have enabled some economies in the union to be resilient against the health crisis. The results suggest that the BCEAO maintain and strengthen its monetary ease policy, given the persistence and multiple waves of the pandemic. In addition, it must stay the course on its targeting inflation policy which is very crucial for the price stability and growth of the WAEMU economies.
Originality/value: This study uses monthly data to highlight the cyclical components while assessing the short- and long-term effects of the pandemic on the dynamics of the supply of bank credit in each WAEMU country.
JEL Classification
Time-Series Models • Dynamic Quantile Regressions • Dynamic Treatment Effect Models • Diffusion Processes (C22)
Insurance • Insurance Companies • Actuarial Studies (G22)
Africa (O55)
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