Bank Al-Maghrib Inspires High Investor Confidence with Steady Interest Rates

Monday 18 December 2023 - 11:15

Rabat - As inflation shows signs of deceleration, Morocco's central bank, Bank Al-Maghrib, is widely expected to maintain benchmark interest rates at 3% during its upcoming quarterly meeting on December 19th.

According to a recent survey conducted by Attijari Global Research, there is unanimous agreement among foreign investors, with near-consensus overall, that interest rates will remain stable this quarter. The survey, which polled 35 influential investors in Morocco's financial markets, revealed that 100% of foreign investors and 99% of local investors anticipate no change to interest rates by the central bank. This high level of investor confidence is likely attributed to early indicators suggesting that the aggressive monetary tightening policies implemented over the past year have started to mitigate inflation.

Despite significant rate hikes by the central bank in 2022, the projected average inflation for 2023 is now expected to be 6%, a slight decrease from the 6.6% rate observed last year. Looking ahead to 2024, experts forecast a further decline in inflation to 2.6%.

While food prices remain elevated, contributing to inflation throughout the year, the central bank opted to keep rates steady in September instead of implementing another hike. This decision followed Morocco's commitment of $11.7 billion to rebuilding areas affected by the September 8th earthquake.

Maintaining current interest rates at this juncture would not only assist in balancing the control of inflation but also support crucial reconstruction efforts through a more lenient monetary policy. Additionally, it may prevent further economic slowdown during Morocco's delicate recovery phase.

With investor opinions aligning, the central bank meeting tomorrow is poised to be an uneventful affirmation of recent policy shifts—a welcome indication of stabilization and confidence for Morocco's economy.