Morocco’s banking liquidity deficit eases as bank lending growth accelerates

Morocco’s banking liquidity deficit narrowed over the summer while bank lending to the nonfinancial sector continued to accelerate, according to a monetary policy report released by Bank Al-Maghrib following its third quarterly board meeting of 2026.

The central bank said the average banking liquidity shortfall fell to 129 billion dirhams ($13.9 billion) in July and August, from 138.6 billion dirhams in the second quarter.

As a result, Bank Al-Maghrib reduced its average liquidity injections to 146.8 billion dirhams, from 158.7 billion dirhams in the second quarter.

The liquidity injections included 51.5 billion dirhams in seven-day advances, 48.5 billion dirhams in secured repurchase operations and 46.7 billion dirhams in guaranteed loans under programs supporting financing for very small, small and medium-sized businesses.

Despite the changes in liquidity conditions, the interbank interest rate remained aligned with the central bank’s key interest rate, which was maintained at 2.25%.

Lending growth accelerates

Bank lending to the nonfinancial sector continued to gain momentum, with annual growth accelerating to 10.1% in July from 9.8% in the second quarter, the central bank said.

Loans to private companies rose 11%, up from 8.1% in the second quarter, driven by faster growth in cash and treasury facilities, which increased 11.3%, and equipment loans, which rose 18%.

Credit also benefited from an expansion in lending to local authorities linked to projects including seawater desalination and the expansion of high-speed rail infrastructure planned in April, according to the report.

Meanwhile, lending to public companies slowed sharply, with annual growth falling to 3.1% from 15.9%.

Household lending increased 3.6% in July, including a 2.2% rise in housing loans and a 5.2% increase in consumer credit.

Interest rates rise for businesses

A Bank Al-Maghrib survey of banks showed that the overall lending rate rose by 15 basis points during the second quarter to 4.81%.

For nonfinancial companies, the rate increased by 17 basis points to 4.71%. Equipment loans saw a particularly sharp increase of 29 basis points, reaching 4.65%, while rates on real estate development loans fell by 2 basis points to 5.35%.

Rates remained broadly stable by company size, at 4.56% for large companies and 5.20% for small and medium-sized enterprises.

For households, the average lending rate declined by 15 basis points to 5.59%. Rates on overdrafts and treasury facilities fell 170 basis points to 5.51%, while housing loan rates declined 13 basis points to 4.53%.

Cash circulation remains strong

Growth in Morocco’s broad monetary aggregate, M3, slowed to 11.2% year-on-year in July from 11.7% in the second quarter, mainly because of slower growth in money-market mutual funds and foreign-currency deposits.

Cash in circulation continued to grow rapidly, rising 18% year-on-year after an 18.4% increase in the second quarter.

Demand deposits increased 11.2%, while term deposits declined 2.2%.

Bank Al-Maghrib said the monetary developments also reflected slower bank credit growth alongside faster growth in net claims on the central government and official foreign-exchange reserves.

Liquidity needs expected to rise

The central bank expects banks’ liquidity needs to continue deteriorating gradually, reaching 146 billion dirhams by the end of 2026 and 168.2 billion dirhams in 2027.

The increase is expected to be driven largely by continued strong growth in cash in circulation, which Bank Al-Maghrib projects will rise 15.2% in 2026 and 9.2% in 2027, after growing 15.5% in 2025.

Bank credit growth is projected to accelerate from 4.7% in 2025 to 8.1% in 2026 before slowing to 6.1% in 2027.

M3 money supply is expected to grow 9.8% in 2026 and 6.2% in 2027, according to the central bank.