Liquidity needs in Morocco will worsen in 2020 and amount to 153.9 billion dirhams ($15.3), an increase of more than 91 billion dirhams ($9.1 billion) compared to 2019, Morocco’s Higher Planning Commission (HCP) has announced.
In its economic outlook report for 2021, the HCP said Morocco’s hard currency inflows are expected to take a hit due to fall in exports, foreign direct investments and travel receipts, leading to a decrease in hard currency reserve level.
According to the report, resorting to external debt will reduce the depletion of this reserve, which will decline in 2020 to about 212 billion dirhams ($21.2 billion), without the earlier drawn $3 billion liquidity credit line from the International Monetary Fund.
In light of these circumstances, the HCP said the central bank has adopted a flexible monetary policy that would maintain an adequate level of official reserves to mitigate pressures on the balance of payments and support the national economy.
It includes cutting its benchmark interest rate by 50 basis points to 1.5 percent to help the economy recover from the impact of the new coronavirus pandemic.
The bank also cut the reserve rate to zero percent from two percent; a step it said would release 10 billion dirhams (one billion dollars).
The HCP noted in its report that these requirements will enable improving conditions to refinance banks by providing more cash resources.
They will also lead to lower interest rates for bank loans provided to enterprises and individuals, it stressed, adding that loans are expected benefit the economy by about 4.9 percent, instead of the 5.6 percent recorded in 2019.
It is noteworthy that the HCP is the Moroccan national statistics office. It is the country’s main body that issues economic, demographic, and social statistics.
HCP’s roles include drawing up national accounts, evaluating the macroeconomic framework, and carrying out situation studies and prospective research.
