Analysis of the Effect of Monetary Policy Interest Rate on Bank Credit to the Private Sector in Mozambique

Abstract

This study analyzes the effect of the monetary policy interest rate on bank credit to the private sector in Mozambique, considering macroeconomic variables such as inflation, real GDP, money supply, and the exchange rate. The research employed econometric methods, including simple and multiple regression, multicollinearity diagnostics, and graphical analysis, to evaluate the relationship between interest rates and credit. The results indicate that the interest rate exerts a statistically significant influence on credit, although with a positive sign, contrary to the theoretical expectation of a restrictive effect. Other variables were not statistically significant, except for the exchange rate, which showed a negative tendency. The analysis suggests that credit dynamics in Mozambique respond in a complex way to monetary policy, reinforcing the need for dynamic, multivariate models to capture net effects. The study contributes to the debate on monetary policy transmission mechanisms in emerging economies and provides insights for decision-making by the Bank of Mozambique.