Recommendations to the central bank for implementing an Islamic monetary policy in Morocco: what instruments and prerequisites?

Abstract

This article represents the first scientific contribution in Morocco highlighting and elaborating on the necessity of adopting an Islamic monetary policy in the presence of participative banks. Drawing upon international experiences from central banks in countries such as Malaysia, Bahrain, Sudan, and Kuwait, the article identifies eleven instruments of Islamic monetary policy that can serve as inspiration for countries with a growing Islamic banking system but have not yet adopted an operational Sharia-compliant monetary framework, as is the case with Morocco. The article also elaborates on the prerequisites for activating monetary transmission channels via participative banks in Morocco, conditioning it upon the establishment of an Islamic monetary policy, the development of Sukuk and the Islamic interbank market, as well as the expansion of Islamic banking.