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Title (Arabic)

دور أدوات السياسة النقدية في تحفيز الاستثمارات المحلية في الجزائر

DOI

10.33095/jeas.v25i110.1590

Abstract

The various countries seek to encourage their local investments through the various policies they follow. The most important of these is the monetary policy, which is a means and procedures taken by the monetary authority to control the supply of money and maintain its stability of its financial impact on economic activity. The effect of monetary policy is to stimulate domestic investment through money supply that is inversely related to the interest rate and a direct relationship with domestic investment. When money supply increases, interest rates fall and local investment growth rates rise, but when the rise in money supply is high, Inflationary measures that negatively impact savings and investment. In this case, the monetary policy tools of compulsory reserve and the rate of rebate play a vital role in absorbing this excess liquidity. Thus, the most important variables for private investment in Algeria are Interest rate, money supply.

Abstract (Arabic)

Various countries strive to stimulate domestic investment through diverse policy frameworks, most notably monetary policy, which encompasses the measures and procedures implemented by monetary authorities to regulate and stabilize the money supply due to its profound impact on economic activity. The influence of monetary policy in incentivizing domestic investment is channeled through the money supply, which maintains an inverse relationship with interest rates and a direct correlation with domestic investment; specifically, an expansion in the money supply typically leads to lower interest rates, thereby fostering higher growth rates in domestic investment. However, excessive growth in the money supply may trigger inflationary pressures that adversely affect both savings and investment; in such instances, monetary policy instruments—primarily legal reserve requirements and the discount rate—play a crucial role in absorbing excess liquidity. Consequently, the primary determinants of private investment in Algeria can be identified as the interest rate, money supply, legal reserve ratio, and the discount rate.

First Page

293

Rights

http://creativecommons.org/licenses/by-nc-nd/4.0

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