Bank Al-Maghrib likely to keep key rate unchanged as oil prices ease

Economists expect Bank Al-Maghrib to keep its benchmark interest rate unchanged at its upcoming policy meeting on June 23, citing continued uncertainty surrounding global economic conditions and recent developments in energy markets.

The central bank’s board left the key rate unchanged at 2.25% during its last meeting on March 17.

Economic analyst Abdelkhaleq Tehami said earlier expectations had pointed toward a possible rate increase due to concerns over rising global energy prices and their potential impact on inflation.

However, Tehami said a recent agreement between the United States and Iran, coupled with a decline in oil prices and the prospect of increased Iranian oil exports, has altered the outlook.

“Under these circumstances, Bank Al-Maghrib is likely to adopt a wait-and-see approach and monitor developments before taking any major action,” Tehami told Hespress AR.

He said policymakers are expected to postpone any adjustment until a clearer picture emerges regarding the durability of the ceasefire and the future direction of global energy prices.

According to Tehami, maintaining the current rate appears to be the most appropriate option. Lowering rates could fuel inflation if regional tensions were to flare up again, while raising borrowing costs could undermine economic activity at a time when the domestic economy still requires support.

“The prevailing uncertainty makes keeping rates unchanged throughout this period the safest option,” he said.

Economist Omar Kettani echoed that view, arguing that policymakers face a difficult balancing act between encouraging investment and containing inflation.

“The challenge is that inflation has slowed but remains structurally present, while investment still needs support,” Kettani said. “The decision is caught between lowering rates to stimulate investment or raising them to combat inflation.”

Given those competing pressures, Kettani said maintaining the current rate would allow policymakers additional time to assess whether the ceasefire in the Middle East holds and whether global economic conditions stabilize.

He noted that Morocco remains particularly vulnerable to fluctuations in international commodity prices because it imports significant quantities of grain and other goods priced in U.S. dollars.

While external price pressures have eased somewhat in recent weeks, Kettani warned that Moroccan households continue to face the effects of accumulated inflation and persistently high living costs.

He added that prices tend to rise more easily than they fall, reinforcing the case for policy stability. Keeping rates unchanged would also help protect ongoing investment projects while preserving flexibility for future monetary policy decisions, he said.