Morocco’s central bank has retained its benchmark interest rate at 2.25 per cent, citing a stable inflation outlook despite rising global uncertainties linked to geopolitical tensions in the Gulf.
The decision was announced in a statement following the bank’s quarterly policy meeting on Tuesday.
The apex bank noted that while the impact of the Middle East conflict is expected to remain limited under a short-lived scenario, prolonged or escalated tensions could pose risks through higher energy prices and external account pressures.
What the Moroccan central bank is saying
The central bank said inflation is expected to remain moderate despite global economic uncertainties.
- Inflation is projected to remain stable at 0.8 per cent in 2026.
- It is expected to rise slightly to 1.4 per cent in 2027.
- The impact of the Middle East conflict is expected to remain “relatively contained” under a baseline short-term scenario.
- However, risks could intensify if the conflict becomes prolonged or escalates further.
The bank emphasised that global developments, particularly energy price movements, will remain key factors influencing the country’s economic outlook.
More insights
The central bank revised its economic growth outlook upward for 2026, supported by improved agricultural output.
- Growth is projected at 5.6 per cent in 2026, up from 4.8 per cent recorded last year.
- The improvement is largely attributed to stronger farming output following abundant rainfall.
- Cereal production is expected to reach 8.2 million metric tons this year.
- Growth is forecast to slow to 3.5 per cent in 2027, assuming average agricultural conditions.
The improved outlook reflects the significant role of agriculture in Morocco’s economic performance.
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Despite stronger growth prospects, external sector pressures are expected to increase.
- The current account deficit is projected to widen to 3.1 per cent of GDP in 2026, up from 2.3 per cent last year.
- The increase is linked to higher energy import costs.
- However, revenues from phosphate and fertiliser exports, remittances, tourism and foreign direct investment are expected to rise.
- Foreign exchange reserves are projected to reach 482 billion dirhams (about $51.5 billion) by 2027, covering approximately 5.5 months of imports.
These projections highlight both the opportunities and vulnerabilities in Morocco’s external sector.
What you should know
Recent monetary policy decisions across African economies reflect varying responses to inflation and growth dynamics.
- In February, Nairametrics reported that the Bank of Uganda (BoU) retained its benchmark Central Bank Rate (CBR) at 9.75%, maintaining its accommodative monetary policy stance amid a stable inflation outlook.
- Also, the Bank of Zambia reduced its benchmark interest rate for the second consecutive meeting, cutting it to 13.5% from 14.25% as inflation shows clearer signs of moderation.
- The Central Bank of Nigeria (CBN) reduced its Monetary Policy Rate to 26.5 per cent from 27 per cent.
- These moves reflect efforts by central banks to balance inflation control with economic growth.
