Bank Al-Maghrib seen holding rate at 2.25% as Iran deal clouds oil outlook

Bank Al-Maghrib is expected to leave its benchmark interest rate unchanged at 2.25% on June 23 as uncertainty over the durability of the US-Iran agreement and its impact on global energy prices argues against an immediate move, two economists said.

The Moroccan central bank kept its key rate unchanged at its previous policy meeting on March 17, balancing easing inflation against the need to support investment and economic activity.

Economist Abdelkhalek Touhami told Hespress he had previously expected a modest rate increase because forecasts pointed to sustained pressure on international energy prices.

The recent agreement between Washington and Tehran, however, was followed by a decline in oil prices and raised the possibility of additional Iranian supply returning to global markets, reducing the urgency for monetary tightening, he told Hespress.

Touhami said the central bank was likely to wait for clearer evidence that hostilities had ended and that the fall in energy prices would persist.

Holding the rate was safer than either raising or cutting it, he said. A reduction could add to inflationary pressure if conflict resumed and energy prices rebounded, while an increase could weaken an economy that still requires support.

Economist Omar Kettani also expected no change, saying policymakers faced competing signals.

Inflation has eased, but the cumulative rise in consumer prices continues to weigh on households, while lower borrowing costs could help investment, he said.

“The best option under the current circumstances is to maintain the present rate,” Kettani told Hespress, arguing that the central bank should allow more time to assess whether the ceasefire or agreement holds.

Morocco is particularly exposed to external price movements because it imports energy, cereals and other goods priced in dollars. A renewed increase in international commodity prices would feed directly into domestic costs and the trade bill.

Kettani said downward pressure on imported inflation had recently eased, but warned that retail prices generally rise faster than they fall.

Both economists therefore saw a rate hold as the most likely outcome, allowing Bank Al-Maghrib to support existing investment while retaining room to respond if geopolitical tensions again push energy and food prices higher.