Morocco’s Central Bank Lowers Key Interest Rate to Stimulate Growth

In March 2025, Morocco’s Central Bank decreased its key interest rate from 2.5% to 2.25%. It expects inflation to remain around 2% and projects economic growth rates of 3.9% for 2025 and 4.2% for 2026. A program supporting financing for small enterprises has also been announced.

The Central Bank of Morocco has decided to reduce its key interest rate by 25 basis points, setting it at 2.25%, a return to the borrowing costs observed in 2022. This adjustment follows similar reductions made in June and December of the previous year. Despite a projected slight increase in inflation rates, the central bank anticipates it will stabilize around 2% for the upcoming two years, having risen from 0.7% in December 2024 to 2% in January.

Forecasts indicate that Morocco’s economic growth is expected to rise to 3.9% in 2025 and 4.2% in 2026, a notable improvement over the approximate 3.2% growth rate recorded in 2024. In tandem with this fiscal shift, the central bank has introduced a new initiative to support financing for very small enterprises. This program will provide refinancing to participating banks at a rate set at the key policy rate minus 25 basis points.

In summary, the Central Bank of Morocco’s reduction of the key interest rate to 2.25% aims to stimulate economic activity and support small enterprises amidst moderate inflation expectations. With projected growth rates improving in the coming years, this strategic move reflects the bank’s commitment to fostering financial stability and economic expansion.

Original Source: www.tradingview.com