Moroccan Banks Face Cash Crunch as Pandemic Spurs Withdrawal Surge

The massive withdrawals made in recent days could reach a peak. A situation that could be confirmed in the coming days, when salaries and CNSS benefits are paid to employees on technical unemployment. The probability is high that the triggering of the process of paying direct aid to families with members working in the informal sector will aggravate the situation.

To reverse the trend, banking and financial regulators propose to encourage the use of m-wallets, food baskets in rural areas, as well as online bill payment; which will help to curb the use of cash in the very near future. The goal is to avoid a scenario similar to last summer (explosion of withdrawals due to holidays and Eid El Kebir leading to a lack of liquidity in ATMs).

However, these solutions have quickly shown their limits in the current context marked by the COVID-19 pandemic. This is what justifies the calls for the relaxation of the refinancing mechanism with Bank Al Maghrib, as well as the reduction of the debit account rate (CCR) from the current 7% to 2% to inject liquidity, with thresholds of amounts to be defined by BAM. Another solution: reduce the monetary reserve for a period of 3 months to be extended, in case of persistent liquidity tensions and relaxation on the part of the central bank in terms of prudential rules.