Bank Liquidity in Morocco: Deficit Eases Over a Week

During the week of 21st to 27th April, the deficit of bank liquidity in Morocco has lightened by 3.98% to settle at -$8.26 million (-82.40 MMDH) in weekly average. That is confirmed by BMCE Capital Global Research (BKGR) in its recent note “Fixed income weekly”. This, “at a time when the 7-day advances of the Central Bank have decreased by -$890,000 (-8.87 MMDH) to settle at $3.94 million (39.29 MMDH),” explained the analysts of the company.

For their part, the Treasury’s investments have experienced a slight increase, as observed at the level of the maximum daily outstanding amount. The latter was established at $1.29 million (12.90 MMDH) on April 25th, against a maximum daily outstanding amount of $1.09 million (10.90 MMDH) during the previous week.

In addition, the weighted average rate of the money market remained stable at 1.5%, while MONIA (Moroccan Overnight Index Average: overnight monetary reference index, calculated on the basis of repo transactions, having as collateral Treasury bills), rose to 1.468% against 1.425% at the end of the previous week.

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Weak Treasury lift

Regarding the primary market, BKGR analysts note that the Treasury has carried out, during this week, a single exercise on the 26-week line for an amount of $30 million (300 MMDH) and at a limit rate of 1.6%. In this context, the primary rate curve recorded a rise of 11 basis points to 1.6% on the said maturity.

The secondary market has, for its part, experienced a decrease in volume. Indeed, at the end of last week, the overall volume recorded on this market fell to $67 million (6.7 billion MDH), against $1.27 million (12.7 billion MDH) during the past week, with nearly 42% of trading polarized on medium-term maturities.

Regarding the secondary curve, the largest variations were observed on the 2-year line with a decrease of 7.2 basis points (bps), to 1.83%, and on the 10-year line with a rise of 7.1 bps, to 2.53%.

BAM will act more on the market

In its weekly forecast analysis, BMCE Capital Global Research estimates that Bank Al-Maghrib should strongly increase, over the next period, its intervention on the money market with the injection of $4.91 (49 MMDH) in the form of 7-day advances against $3.94 million (39.3 MMDH) the previous week.

Regarding the bond forecasts, it is noted that the investments of the moneylender of the Kingdom seem to be located at rather high levels, “confirming the relative easing of the budgetary pressure,” ensured analysts in this sense.

This should allow the yield curve to continue its stability and, probably, to maintain its trend during the next auctions.

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