According to BMCE Capital Global Research (BKGR), Morocco’s public debt market experienced a notable slowdown this week, with investors reacting to a cautious stance by the Treasury and subtle shifts in the central bank’s approach. While activity on the primary market came to a near standstill, yields in the secondary market broadly declined, reflecting growing expectations of global monetary easing.
In a rare move, the Treasury issued just 300 million dirhams in five-year bonds, far below the 2.53 billion dirhams it had initially offered. This pullback wasn’t driven by lack of interest, but rather by strategy: following a substantial cash injection through international markets, Moroccan authorities appear to be playing for time, opting to sit tight and wait for more favorable financial conditions.
On the secondary market, bond yields dipped across nearly all maturities. The most significant declines were seen on five-year notes, which dropped by 3.88 basis points, along with short-term 26-week and 52-week bills, down 2.37 and 2.19 basis points, respectively. This downward movement aligns with growing global sentiment that major central banks may soon pivot toward lower interest rates, signaling a shift toward looser monetary policy in response to cooling inflation and sluggish growth.
Meanwhile, Morocco’s central bank, Bank Al-Maghrib, is subtly tightening the reins. Its weekly liquidity injections were scaled back to 49.2 billion dirhams, compared to 51.7 billion the previous week. At the same time, the banking sector’s liquidity shortfall widened sharply to 168.3 billion dirhams, underlining the mounting pressure on commercial banks.
Looking ahead, the balancing act between the Treasury’s comfortable cash position and the central bank’s cautious stance will be key. If current trends hold, the coming weeks may bring further stabilization or even a gradual decline in interest rates. Still, with global financial markets on edge, Moroccan policymakers will need to stay alert. For emerging markets like Morocco, even subtle shifts in the global monetary landscape can ripple through with outsized impact.
