Bank of Morocco Slashes Key Rate, Unveils Measures to Boost Economic Recovery

In a press release, the bank’s council decided, after a 25 basis point cut last March, to reduce the key rate by 50 basis points. Bank Al-Maghrib has also put in place specific provisions to provide support for the refinancing of participatory banks and microfinance associations.

These new decisions, combined with the various easing measures already implemented, in particular the expansion of the eligible collateral for its refinancing operations, the strengthening of its unconventional programs, as well as the temporary easing of prudential rules, should contribute, with those taken by the Economic Monitoring Committee, to mitigate the impact of the pandemic and support the recovery of the economy and employment.

It has also promised, in view of the particular situation currently prevailing, to pay more attention than in the past to the transmission of its decisions to the real economy. It also announces that it will regularly take stock of this with the highest management of the banking system. According to the same source, BAM claims that it has already refined the framework of its refinancing operations to further favor banks that are making the most efforts in this direction.