Morocco's Banking Liquidity Deficit Increases by 21.9%

Saturday 12 April 2025 - 08:10

By: Dakir Madiha

Morocco's Banking Liquidity Deficit Increases by 21.9%

The liquidity deficit in Morocco’s banking system has surged by 21.9%, reaching MAD 168.3 billion during the week of April 3 to 9. This significant rise highlights tightening conditions within the money market.

According to BMCE Capital Global Research (BKGR), the deficit’s increase follows a reduction of MAD 2.4 billion in the 7-day advances by Bank Al-Maghrib (BAM), bringing the total to MAD 49.2 billion. BKGR’s latest report, titled “Fixed Income Weekly,” emphasizes these developments and their implications for the financial landscape.

Simultaneously, treasury placements have markedly increased, with the daily maximum outstanding balance climbing to MAD 51.1 billion, a stark rise from MAD 8.2 billion in the previous period.

Interest rates have also changed, with the Weighted Average Rate (WAM) dropping to 2.25%. The Moroccan Overnight Index Average (MONIA) has experienced a slight decrease, currently at 2.231%.

Looking ahead, BKGR predicts that BAM will likely decelerate its market interventions, adjusting the 7-day advances to MAD 51.1 billion, down from MAD 66.46 billion in earlier weeks.

Despite an improvement in Morocco’s banking liquidity deficit by 8.26% in January—reaching MAD 136.8 billion—recent trends indicate ongoing pressure within the financial system. Notably, the treasury remains robust, thanks in part to a successful international bond issuance shortly before global markets faced upheaval due to new tariffs imposed by former U.S. President Donald Trump.

The current international environment suggests a potential acceleration in the reduction of key interest rates by major central banks, which may lead to a broader downward trend in bond yields. As Morocco navigates these shifting dynamics, the recent widening of the liquidity deficit serves as a reminder of the persistent challenges facing its financial system, even as the treasury continues to maintain stability.