Morocco's central bank isn't messing around with its money market operations. Bank Al-Maghrib has been pumping serious liquidity into the system through weekly 7-day advances at 2.25%, and the amounts are massive. We're talking 79.5 billion dirhams in mid-December, then 67.5 billion a week later. These aren't small adjustments. They're calculated moves to keep the interbank rate locked onto the target policy rate.
Bank Al-Maghrib's weekly liquidity injections aren't subtle—79.5 billion dirhams worth of calculated precision to anchor interbank rates.
The strategy is working. January's treasury auction raised over 7 billion dirhams, the largest issuance since February 2024. Demand hit 12 billion dirhams, a five-month record. Yields dropped across the board—5, 4, and 22 basis points for 10, 20, and 30-year maturities. Not bad for an economy that grew just 2.6% in 2024, down from 3.4% the year before.
But here's the thing. The central bank has built a solid framework for this. They've got monitoring systems, forecasting tools, and a well-structured liquidity injection process that supports their inflation targeting. Inflation fell to 1% in 2024 from 6.1% in 2023, so clearly something's clicking. The framework uses overnight advances and deposits for daily tweaks, longer-term repos for sustained support, and structural operations when things get persistently weird.
The banking sector pulled its weight too. Aggregate net profit jumped 17.3% in the first half of 2024. Financial resilience held strong despite economic headwinds. Bank Al-Maghrib even launched initiatives for a secondary market for non-performing loans because unpaid debts kept creeping up.
Cash is finally declining, thanks to a tax amnesty that absorbed 37 billion dirhams in 2024. Mobile wallet accounts reached 13.8 million by year-end, with transactions doubling to 19.7 million. Still, mobile payments represent just 0.1% of total transactions. Baby steps.
Looking ahead, GDP growth should accelerate to 3.9% over the next two years. The budget deficit sits at 4% of GDP, but cash surpluses exceed 12 billion dirhams. Beyond domestic operations, Bank Al-Maghrib maintains rigorous foreign exchange interventions to manage the dirham's stability and preserve currency reserves. These operations adhere to compliance requirements that align with international standards for central bank transparency and forex market conduct. The AMMC oversight framework complements the central bank's efforts by regulating foreign exchange trading activities and ensuring market integrity across Morocco's financial sectors. The central bank's approach—blunt, measured, effective—keeps the money market functioning while the broader economy finds its footing.
