A significant majority of investors, 83%, expect Morocco’s central bank, Bank Al-Maghrib (BAM), to slash its benchmark interest rate by 25 basis points at its upcoming policy meeting on September 24, 2023, according to a survey by Attijari Global Research.
Conducted among 35 key investors in Morocco’s financial markets, the poll reflects overwhelming market sentiment in favor of monetary easing. Only 8% of respondents foresee a more aggressive 50-basis-point cut, while 9% expect the central bank to hold rates steady.
The expectation aligns with global trends, as central banks worldwide shift towards looser monetary policies. Recently, the US Federal Reserve reduced its interest rate by 50 basis points to 4.75%, signaling a broader move to combat slowing economic growth and unemployment.
In June, BAM implemented a 25-basis-point rate cut, bringing the key rate to 2.75%. This marked the first adjustment in over a year, prompted by easing inflationary pressures.
The central bank’s policy decisions have a direct impact on borrowing costs across the economy, with lower rates generally reducing the cost of credit for businesses and consumers.
Inflation in Morocco, which peaked at 6.6% in 2022 and eased to 6.1% in 2023, has recently stabilized, bolstering investor confidence.