At the end of its 3 rd monetary policy meeting in 2021, Bank Al-Maghrib maintains its key rate unchanged at its historic low of 1.5% in line with the initial scenario established by Attijari Global Research.
Analysts from the research office come out with three key messages from this meeting. First of all, the recent international inflationary surge is the main concern of the large central banks. Some have already started the monetary tightening process in Q3-21. However, continues AGR, the situation in Morocco remains different through a controllable level of inflation below 2.0% in 2021E.
The second important point relates to the money market whose equilibrium is qualified as “ imperturbable. ” Indeed, BAM continues to satisfy 100% of banking demand through its weekly and LT instruments. In addition, the institution could increase the refinancing capacity of banks due to the expansion of eligible collateral with BAM.
Also read: Bank dividends: BAM will continue to do it on a case-by-case basis
Finally, taking into account the positive outlook for loans during Q4-21, a further cut in the key rate does not seem possible. “Our scenario is supported by the remuneration component of savings which is increasingly coming to the forefront of the financial scene in Morocco “, we read in a note entitled Bank Al-Maghrib more confident, maintains its accommodating policy.
Taking into account the liquidity conditions of the money market, the evolution of the refinancing costs of the economy as well as the outlook for bank loans, AGR maintains its scenario of stability of the key rate for Q1-22.
At the same time, the inflationary component would not constitute as of today, a determining factor justifying a possible monetary tightening on the CT.