Key rate: The decline motivated by “the improvement in the situation of the national economy”


The decision of the Board of Bank Al-Maghrib (BAM) to reduce the key rate by 25 basis points to 2.75%, after keeping it unchanged for four consecutive meetings, takes into account the notable progress in the situation of the national economy , said Tuesday in Rabat, the Wali of BAM, Abdellatif Jouahri.

Taken unanimously by the members of the Bank’s Council, this decision is justified by several favorable factors, in particular the return of inflation to levels in line with the objective of price stability, underlined Mr. Jouahri during from a press briefing held at the end of the second quarterly meeting of the BAM Council for the year 2024.

The Wali noted that the inflation rate should reach, while taking into account the resumption of the partial decompensation process for butane gas, a level below 2% in 2024, specifying that its underlying component, which reflects the trend fundamental price trend, averaged 2.1% over the first five months of the year and is expected to remain close to this level until the end of 2025.

He further noted that the growth of the national economy is expected to accelerate to reach 4.5% in 2025, specifying that this is a level not seen for a long time.

BAM also forecasts a stability of the budget deficit at 4.4% of GDP this year and its reduction to 4.1% in 2025, which is perfectly consistent with the objective of preserving macroeconomic balances mentioned in the framework note of the draft finance law, he added.

The reduction in the key rate was also motivated by the situation of official reserve assets (AOR) which should continue to strengthen, providing cover for around five and a half months of imports of goods and services, he said. maintained, noting that this positive outlook is also supported by the investments undertaken by the Kingdom.

During this meeting, the BAM Board examined and approved the annual report on the economic, monetary and financial situation of the country as well as on the activities of the Bank for the 2023 financial year. It then analyzed the evolution of the national and international situation, as well as BAM’s medium-term macroeconomic projections.

At the international level, the Council noted the relative resilience of economic activity and the decline in inflationary pressures, which should continue although at a slower pace than expected last March.

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