Amid growing global uncertainties, Bank Al-Maghrib (BAM) is reinforcing its accommodative monetary stance, demonstrating a firm commitment to sustaining economic growth. According to the latest report by Attijari Global Research (AGR), the central bank has cut its key interest rate to 2.25%, marking its third consecutive reduction since June 2024.
The AGR report, titled “Bank Al-Maghrib: A More Delicate Inflation-Growth Tradeoff in the Medium Term”, underscores the complexity of BAM’s monetary decisions. With geopolitical tensions, inflationary risks, and a global economic slowdown, BAM is prioritizing investment support and household purchasing power.
Although this decision diverges from market expectations of a rate freeze, it aligns with the broader international monetary trend. AGR forecasts further rate cuts in 2025, potentially reaching an equilibrium of 2%, provided inflationary risks remain contained.
Despite ongoing challenges, AGR projects inflation to remain stable at 2% in 2025. Several key factors contribute to keeping inflationary pressures in check:
Recent rainfall and the cancellation of Eid Al-Adha, which mitigate the impact of water shortages on food prices.
The phased-out gas subsidy and social dialogue under the 2025 Finance Law, expected to have limited inflationary effects.
Lower global energy prices, with Brent crude trading below $70 per barrel.
Looking ahead, inflation is expected to fall below 2% by 2026 (1.8%), granting BAM more room for further monetary easing if needed.
BAM’s move also aligns with Morocco’s ambitious investment agenda, which involves MAD 1.7 trillion over the next five years. A looser monetary stance is particularly significant in reducing public debt costs—every 25-basis-point cut in the key rate translates into an estimated MAD 300 million in annual interest savings for the Treasury.
By adopting a more accommodative policy, Bank Al-Maghrib signals a strong commitment to fostering Morocco’s economic growth while carefully navigating global risks.
