This process, continues Jouahri, was the subject of extensive consultation with national and international institutions as well as with the economic actors concerned. “We involved all stakeholders to develop this framework. “It’s an approach that helps ensure optimal adoption and minimizes gray areas,” he notes. The Kingdom is therefore positioned among the first developing countries to offer clear and comprehensive regulation of crypto-assets. This approach will allow the country to prepare for the economic and financial challenges posed by the digitalisation monetary systems.
Monetary easing: the banks are playing the game!
According to him, these recommendations from the Central Bank have been implemented. The proof, argues Jouahri, is that the 150 basis points of cumulative increases have not been fully passed on to customers in rates. The data shows, according to him, that only 122 basis points out of the 150 will have been applied by the banking sector. For this new reduction in the key rate, it must be part of this same configuration, that is to say that banks must make an almost general reduction in the rates offered to customers, whether individuals or businesses. This will have the virtue of giving a real boost to investments and therefore growth. Asked about the possibility of a potential reduction in the key rate in 2025, Jouahri clarified that this type of decision is the responsibility of the Bank’s Council which regularly analyzes and evaluates data linked to inflation and bases its decisions on this basis. . Thus, Jouahri believes, it is difficult to predict such decisions, as long as they are closely linked to the evolution of several indicators, including economic growth, bank credits, inflation, public finances… In short , all the data that weigh on macroeconomic balances. If the observed trend dictates a relaxation of the key rate, the Council proceeds with this relaxation. But the BAM governor’s fear is that inflation will start to rise again. “For example, the new American administration has a single motto: America first. Likewise, this administration intends to increase the taxation Chinese products on the American market. And the same decision is envisaged for European products. All this data has an impact on us, that’s for sure!”, warns Jouahri.
EU directive on the bridging activity of foreign banks: Morocco defends its MRE
The Wali also recalled that his services have been working for several months on the new European Union directive on the relay activity of Moroccan banks in Europe. “It’s a real problem!”, says Jouahri, who affirms that negotiations are being carried out with various central banks of EU countries, in particular those of Spain and France, so that the financial movements of MRE are not affected by the Directive or its interpretation. Another example cited by the governor of BAM, the tensions in Syria. “Who thought that political problems in Syria would resurface again? Now, it is an established fact in an international context rife with uncertainties and marked by a redistribution of balances at the global level,” says Jouahri.
Economic forecasts: BAM revises models
By addressing the subject of differences in growth forecasts for 2025 between the Executive and the Central Bank, the Wali of the Central Bank believes that the government’s forecasts, as well as those of the Issuing Institute, are based on hypotheses. In his eyes, this logic is necessary. “The hypotheses constructed are made to be revised along the way. For example, for forecasts of the agricultural harvest, the government’s hypothesis is built around the forecasts provided by the Department of Agriculture which can count on an average agricultural yield, of course, but if the sky turns out subsequently more lenient, the data changes and the decisions are readjusted accordingly,” explains the governor of the Central Bank who specifies in passing that the establishment of forecasts does not constitute a pure and hard scientific exercise even if this process is based on models calculations. The latter, adds Jouahri, are also the subject of updating work undertaken by the Central Bank in light of the crises experienced by the Kingdom since 2008. The objective being to refine as best as possible the forecasts of the Banking in the future.
Exchange rate regime: Work meetings set to intensify
On the subject of the reform of the exchange rate regime, Jouahri once again preaches “caution!”, while claiming to have made the various partner institutions of this project, in particular the IMF, aware of the fact of intensifying the pace of joint working meetings in the prospect of being very aware of “their figures” and especially the changes in their data on Morocco. “This is likely to allow us to better understand their analyzes and make the most appropriate decisions accordingly,” maintains the Governor of the Bank. The feedback from these institutions will have been positive according to the Wali, since a good number of these institutions reacted favorably to this request from the Central Bank. Thus, reveals Jouahri, a schedule of meetings is being developed based on these issues. The governor of BAM also assures that any new decision in the process of reforming the exchange rate regime must be duly studied and analyzed on the basis of precise and refined data with all the partners in this strategic project.
Rising unemployment: growth, an inevitable panacea!
Reacting to the figures on the rise in the unemployment rate in Morocco provided very recently by the High Commissioner for Planning, Chakib Benmoussa, following the general census of the population which revealed that this rate reached 21.3% against 16.2% in 2014, Jouahri indicates that BAM mainly relies on HCP figures regarding unemployment and that, as such, the Central Bank does not have other data with which to make a comparison. The governor, however, stressed that there are not 36 thousand solutions to the problem of unemployment. According to him, to be able to truly address this problem, we will have to move towards more solid economic growth, accompanied by a good distribution of wealth. “We have no choice. The public and private sectors must really focus their efforts on development,” summarizes Jouahri. That said, he adds, the non-agricultural sectors are showing positive signs in the sense that they are returning to growth by taking trajectories oscillating between 4 and 5%. And this is where the solution to the employment problem will come from, insists the head of the Central Bank.
Secondary market for bad debts: Investors are already salivating!
Addressing the subject of the secondary market for overdue debts, the Wali of BAM reported the existence of a strong appetite for the secondary market for overdue debts, following the first successful securitization operation of 400 million dirhams, carried out by a Moroccan bank. For Jouahri, this dynamic should make it possible to structure and energize the non-performing debt market, thanks to a legal framework now finalized. The latter, currently in the adoption circuit, will go through several stages before coming into force, with a public consultation and a governmental and parliamentary adoption process. “The secondary market for overdue debts represents a major lever for strengthening the solvency of banks and supporting the national economy. By allowing active management of non-performing debts, this market will help to streamline the balance sheets of financial institutions and improve their capacity for intervention,” concludes Jouahri.
Exit of the Treasury internationally: Morocco readjusts its calendar
Asked about the timetable for Morocco’s next exit on the international financial markets, the Wali of BAM judged that it should take place during the first quarter of 2025. This operation, initially planned for the end of 2024, was postponed in order to to guarantee more favorable conditions. In Jouahri’s eyes, good timing is essential, not only to ensure optimal rate conditions but also to preserve Morocco’s reputation with foreign investors. “We must ensure optimal subscription and determine whether we can opt for long or medium maturities,” specifies the governor of the Central Bank who indicates that the final decision rests with the Ministry of Economy and Finance , with whom the Bank collaborates closely, and is based on an in-depth analysis of developments in international markets.
Boxed
Growth: what BAM predicts for 2025 and 2026
The Central Bank expects economic growth to be limited to 2.6% this year, after 3.4% in 2023, but would accelerate to 3.9% over the next two years, according to its projections. In detail, the Issuance Institute predicts quasi-stability of non-agricultural growth around 3.5% in 2024, before an improvement to 3.6% in 2025 and 3.9% in 2026. For its On the other hand, agricultural added value, suffering from the unfavorable climatic conditions which prevailed during the previous campaign, would show a decline of 4.6% in 2024, before showing, under the assumption of cereal harvests of 50 million quintals equivalent to the average of the last 5 years, increases of 5.7% in 2025 and 3.6% in 2026.
