Treasury Strategizes Amid Market Calm as Bank Al-Maghrib Boosts Liquidity Support

In a context of market stabilization, the Treasury continues to mobilize resources sparingly, while Bank Al-Maghrib is stepping up its interventions to support banking liquidity. BKGR highlights a recovery in long-term rates on the secondary market and anticipates favorable monetary decisions at the end of the year.

The financial scene has seen measured momentum over the past week, as the continued reduction in the bank liquidity deficit is accompanied by positive signals on the bond markets. According to BMCE Capital Global Research’s (BKGR) Fixed Income Weekly, developments on the primary and secondary markets reveal a favourable economic climate, marked by stable rates and controlled management of the Treasury’s needs.

Reduction of the banking liquidity deficit by Bank Al-Maghrib

Bank Al-Maghrib has maintained its efforts to alleviate the banking liquidity deficit, which contracted by 7.79% to reach a weekly average of 140 billion dirhams (MMDH).

This decline is partly explained by the adjustment of the volume of 7-day advances, now set at 59.8 billion. A development that BKGR attributes to proactive management of liquidity injections, thus strengthening the stability of the interbank rate, maintained at 2.75%.

Moderate fundraising on the primary market

The Treasury only carried out a limited fundraising this week, concentrated on a 52-week maturity line. The auction raised 500 million dirhams (MDH) at the limit rate of 2.6351%, without disrupting the primary rate curve.

This moderation is part of a prudent strategy, where the Treasury continues to display limited financing needs for the last month of the year. BKGR emphasizes that these needs should remain below 4.5 billion dirhams, reflecting a comfortable budgetary situation.

Recovery of long-term rates on the secondary market

The secondary market, for its part, recorded a notable increase in rates on long maturities. The 10-year and 15-year lines increased by 5 and 3.9 basis points (bps), respectively, reflecting a renewed interest in long-term bonds.

This trend contrasts with the slight decline observed on the 52-week and 2-year lines, which fell by 3 and 7.5 bps respectively. These adjustments confirm a generally stable rate curve, but with an upward slope in the long term. In terms of forecasts, BKGR anticipates an intensification of Bank Al-Maghrib’s interventions on the money market, with a volume of 7-day advances increased to 63.7 billion dirhams.

On the bond side, investors are expecting a favourable decision from the monetary policy committee, scheduled for December 17th. This could herald further easing, further strengthening financing conditions on the domestic market.

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First published in LES ECO.ma. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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