Politique monétaire : statu quo, un scénario toujours privilégié

Monetary policy: status quo, still a preferred scenario

Saturday, June 18, 2022 at 02:01 PM

Casablanca – A few days before the second quarterly meeting of the Board of Bank Al Maghrib (BAM) for the year 2022, the forecasts of market connoisseurs point to maintaining the key rate at its current level, i.e. 1.5 %.

While the world’s largest central banks are tightening the screws in the face of galloping inflation, BAM’s accommodative monetary policy continues to support the recovery of the national economy, in a global context marked by a succession of crises.

Imported inflation

Price stability and keeping inflation at an acceptable level are central concerns for any central bank. However, the inflationary pressures that are increasingly being felt come from outside, which reduces the room for intervention in terms of monetary policy, according to observers.

In a pre-advisory flash, CDG Capital Insight reports “a strong upward slippage in inflation and underlying inflation at historically high levels”, noting that these inflationary pressures emanating from “the component imports and a supply shock on fresh food, with slowing household demand”.

Consequently, “the two components of inflation, namely food and non-food, have experienced significant increases with historically high levels of the food component of 9.1% in April and March 2022 and an evolution of 5 .9% and 5.3% respectively for non-food products”, specifies CDG Capital Insight.

At the international level, the announcements of the raising of key rates follow one another, in the face of an inflationary spiral which has severely tested the financial markets and weighed down the prospects for economic recovery.

In this wake, the Federal Reserve (Fed) recently made the largest increase in its key rate since 1994, raising the benchmark rate by 0.75% to deal with galloping inflation in the United States.

Faced with the same situation, the Bank of England (BoE) raised its key rate to 1.25%, while the Reserve Bank of India (RBI) raised its key rate by 50 basis points to 4.90%. .

An accommodating policy, engine of growth

The two key rate cuts made by BAM in March and June 2020 helped to cushion the shock caused by the health crisis, by providing economic agents with more affordable financing capable of accelerating their recovery and boosting their performance.

This support via an accommodating monetary policy is always requested by economic actors, penalized in particular by a context of water stress not without consequences on the agricultural sector.

Highlighting an “expected slowdown in economic growth in 2022 driven by a projected significant decline in agricultural GDP and a slight decline in non-agricultural growth”, CDG Capital Insight believes that “it is more likely that the Board of Bank Al-Maghrib maintains the key rate unchanged, given the post-covid19 crisis recovery conditions, which remain fragile”.

According to a survey conducted by Attijari Global Research (AGR), the consensus of financial investors pleads for a stability of BAM’s key rate, stating that 63% of investors surveyed anticipate a status quo of BAM’s key rate at the end of its next board.

This shows the market’s appetite for financing at reasonable rates in order to initiate their recovery, which implies a stabilization of the key rate, the key instrument for influencing the cost of financing.

As usual, all eyes will be on the monetary policy meeting, which will unveil the guidelines for monetary policy, which is supposed to reconcile, as accurately as possible, growth and inflation objectives, in a context of the most uncertain at the international level. .

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