Morocco’s official foreign exchange reserve assets to increase by 10.8%, HCP

Official foreign exchange reserve assets are estimated to increase by 10.8% in the second quarter of 2022, the High Commission for Planning (HCP) said in a note published Tuesday.

Treasury's monetary debt will see an increase of 17.2% in the same period, HCP added.

The money supply is estimated to grow by 5.2% in the first quarter of 2022, compared to 7.6% in the same period last year.

The need for liquidity of banks will continue to decrease year-on-year, following the decline of fiduciary circulation and the improvement of foreign exchange reserves.

Morocco's central bank, Bank Al-Maghrib will also reduce the volume of its financing to banks.

Economy growth will be strengthened, with the stock increasing by 4.3% year-on-year in the first quarter of 2022, up compared to 3.8% recorded in the same quarter last year.

This increase will be attributable to the improvement in the granting of investment loans to businesses, said the same source.

On the interbank market, interest rates will remain stable at 1.5% in the first quarter of 2022, the same level as Bank Al-Maghrib's key rate.

At the same time, rates will increase on the Treasury bill auction market, with rise of 7.13 and 9 basis points respectively.

Stock market to increase slightly

The stock market growth is expected to increase slightly in the first quarter of 2022, which began at the end of 2021.

The MASI stock market index is estimated to increase by 11.6% year-on-year in the first quarter of 2022, following an increase of 18.3% in the same quarter of the previous year.

This progress reflects the growth in stock prices of a significant part of sectors, including engineering and industrial capital goods, pharmaceuticals, forestry and paper, chemicals, distribution, and real estate development.

The liquidity of the stock market will continue to grow and the volume of the related transactions would increase by 13.3%, year-on-year, added HCP in its note.