Interest Rate Upped to 3%

The Central Bank (Bank Al-Maghrib – BAM) decided, on Tuesday, to increase the Interest Rate by 50 basis points to 3% to slow the inflation wave and stabilize prices in the market, according to a release by the bank.
Inflation is increasing in the Kingdom, reaching 6.6% last year due to domestic supply shocks on a variety of food products. It is expected to remain at high levels over the medium term and stand in 2023 at 5.5 percent on average.
The bank forecast that, after a sharp deceleration to 1.2 percent in 2022, growth in the national economy is expected to consolidate at 2.6 percent this year and to accelerate to 3.5 percent in 2024.
The board seemed to be optimistic about the latest rainfall that will help the agricultural sector to recover. However, non-agricultural sectors were affected by external environmental deterioration and would continue to slow down in 2023, with their value-added increasing by 2.7% instead of 3.4% in 2022.
The significant trade dynamics in 2022 resulted in a record trade balance expansion to 311.6 billion dirhams. Yet, strong increases in remittances and travel revenues helped to keep the current account deficit at 3.9 percent of GDP.
The Board praised the country’s recent success, including its removal from the Financial Action Task Force (FATF) grey list, the Line of Credit Morocco secured from the IMF, and the positive conditions achieved during its most recent Treasury issue on the international market.