At the end of last week, the average bank liquidity deficit in Morocco remained at -107.2 billion dirhams (MMDH), or -1.83%. Meanwhile, 7-day advances from the central bank fell by 5.9 MMDH to 32.7 billion. Treasury investments, meanwhile, rose significantly, with maximum daily outstandings reaching 21.6 MMDH on September 6, compared with 18.6 billion the previous week.
Against this backdrop, the weighted average rate (TMP) remained stable at 3.0%, while the MONIA interbank market rate (Moroccan Overnight Index Average: overnight monetary reference index, calculated on the basis of repo transactions with Treasury bills as collateral) fell slightly to 2.905%.
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Stability confirmed on the primary market, despite the shortage in bank liquidity
During the last auction session, the Treasury raised several issues on mostly short maturities, notably on the 13-week, 52-week, and 2-year lines, for amounts of MAD 450 million, MAD 1.85 million, and MAD 200 million respectively, at unchanged limit rates of 2.9400%, 3.3836% and 3.5353%. On the secondary market, rates showed a mixed trend.
The biggest variations were seen on the 2-year line, with an increase of 4.2 basis points, while the 13-week line recorded a drop of 5.5 basis points. Most other maturities remained virtually unchanged.
Central Bank to the rescue
With regard to monetary forecasts, Bank Al-Maghrib is expected to step up its intervention in the money market, injecting 34.2 MMDH in the form of 7-day advances, compared with 32.7 billion the previous week. As for bond forecasts, they seem to indicate that Treasury issues will stabilize at around 7 MMDH to 9 MMDH per month, given the expectation of no change in the key rate at the next Central Bank meeting.
This situation should, in principle, maintain primary rates at their current levels. Despite a context marked by a shortage of bank liquidity, the market seems to be maintaining its stability, offering a degree of reassurance to investors and economic players. The central bank’s forthcoming decisions and the evolution of rates will nevertheless need to be closely monitored to anticipate any significant changes in the landscape.
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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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