This scenario is supported by two observations, namely a return of real rates to positive territory in the medium term reducing pressure on national savings and a desire to ensure optimal management of the anchoring of the dirham reference basket, emerges -he from a recent AGR report entitled “Monetary support confirmed for Morocco’s economic dynamics”.
In this month of December, BAM lowered its TD by 25 basis points (bps), after having reduced it for the first time since the Covid crisis by 25 bps in June 2024, recalls the same source, adding that the Monetary institution, as anticipated, continues its accommodative orientation by reducing its key rate to 2.5% at the end of the year, i.e. a level similar to that observed in December 2022.
This decision is explained by the visible progress in terms of inflation since its historic peak of 10% observed in February 2023.
Indeed, inflation stood at 0.7% in October 2024, its lowest level since June 2024, and should settle around 1% in 2024 after 6.1% in 2023. Originally, deflationary budgetary measures in favor of supporting the purchasing power of households, the establishment of support for agricultural production chains, family allowances and aid, as well as the start of targeting commodity subsidies.
“Bank Al-Maghrib, the first central bank in North Africa to initiate a monetary pivot in June 2024 and whose TD remains the lowest in its region, seems determined to support the investment dynamic in Morocco in a context of decline inflationary tensions”, underlined the AGR experts. According to them, reducing the cost of financing the economy would further stimulate investment while preserving future budgetary ratios.
And added: “According to our estimates, the cumulative drop of -50 bps in the TD in 2024 would save the Treasury an annual interest charge of around 620 MDH. Note that Morocco faces many challenges, namely: the post-earthquake reconstruction of the Al Haouz region, the social reforms of the new development model, the energy transition and the organization of the 2030 World Cup. “Public investment would mobilize an envelope of 1,700 billion dirhams over the period 2025E-2030E, a level equivalent to 1.2 times Morocco's GDP.”
