Morocco Lowers Key Interest Rate to Stimulate Economic Growth

The Central Bank of Morocco has lowered its key interest rate to 2.25% from 2.5% during its March 2025 meeting, aligning borrowing costs with 2022 levels. Inflation is projected to remain around 2%, with economic growth anticipated at 3.9% in 2025 and 4.2% in 2026. A new program to support financing for very small enterprises was also announced.

In March 2025, the Central Bank of Morocco reduced its key interest rate to 2.25% from 2.5%, reverting borrowing costs to their 2022 levels. This reduction follows previous cuts made in June and December of the prior year. The bank’s decision comes amidst expectations for a slight increase in inflation, which is projected to stabilize around 2% over the next two years.

Notably, inflation experienced a rise, reaching 2% in January 2025, compared to 0.7% in December 2024. Economic growth forecasts indicate an increase to 3.9% in 2025 and 4.2% in 2026, a significant improvement from the approximately 3.2% growth experienced in 2024.

Furthermore, the Central Bank introduced a new initiative to bolster financing for very small enterprises. This program entails refinancing opportunities for participating banks at a preferential rate, set at the key policy rate minus 25 basis points, aiming to enhance support for the small business sector.

The Central Bank of Morocco’s decision to lower the key interest rate reflects a strategic move to stimulate economic growth while managing inflation levels. With a projected inflation rate of around 2% and improving growth forecasts, Morocco’s financial policies, including support for small enterprises, demonstrate a comprehensive approach to fostering economic resilience.

Original Source: www.tradingview.com