Surging Liquidity Demand in Morocco: Central Bank's Strategic Response

Monday 19 August 2024 - 13:10

Morocco's Banking Sector Faces Heightened Liquidity Needs

In a recent report by Morocco's central bank, Bank Al-Maghrib (BAM), July saw a notable rise in liquidity demand within the country's banking sector. The average weekly requirement soared to MAD 125.3 billion, surpassing June's MAD 124.1 billion.

In response, BAM increased overall liquidity injections to MAD 141.2 billion. This included MAD 57 billion in 7-day advances, MAD 52.2 billion in 1- and 3-month repurchase agreements, and MAD 32 billion in long-term guaranteed loans.

On the interbank market, the average daily trading volume stabilized at MAD 2.6 billion in July, with a weighted average rate of 2.75%.

Significant changes were also observed in the Treasury bills market. Following the BAM Council's decision to lower the key rate by 25 basis points to 2.75% on June 25, 2024, rates experienced a downward trend in July.

Interest rates on deposits saw increases in June, with 6-month deposits climbing by 26 basis points to 2.77% and 1-year deposits by 17 basis points to 3.20%.

Corporate loan interest rates rose by 11 basis points to 5.37%. Notably, cash flow facilities increased by 8 basis points to 5.38%, real estate development loans by 50 basis points to 5.69%, while equipment loans decreased by 12 basis points to 4.99%.

Consumer loan interest rates decreased by 20 basis points to 5.89%, with specific declines of 19 basis points to 7.03% for consumer loans and 2 basis points to 4.79% for housing loans.

This strategic liquidity management by BAM reflects its commitment to stabilizing the financial landscape amid evolving economic demands.