Casablanca – In response to Morocco’s evolving economic conditions, Bank Al-Maghrib (BAM) has announced a reduction of its key interest rate by 25 basis points, bringing it down to 2.5%. This move, decided during the central bank’s quarterly meeting, aims to maintain economic stability as inflation remains under control.

The decision comes as part of BAM’s ongoing efforts to manage Morocco’s economic challenges while supporting growth. Inflation in Morocco has shown significant deceleration, with 2024 inflation projected at 1%, down from 6.1% in 2023. Looking ahead, BAM’s projections show inflation holding steady at 2.4% in 2025, and 1.8% in 2026. These figures are in line with the bank’s target for price stability.

BAM’s board explained that the decision to reduce the key rate was made in light of economic conditions both domestically and internationally. Despite the positive trend in inflation, the bank emphasized the uncertainties surrounding the global economic outlook, which influenced its cautious approach. The reduction, they stated, is meant to support domestic activity while remaining adaptable to future developments.

In recent months, the impact of BAM’s earlier decisions has been visible in the loan market, with a quarterly drop of 22 basis points in lending rates. Businesses have seen a 25 basis point reduction, while rates for individuals have remained largely stable.

Looking ahead, BAM’s projections suggest a steady recovery in non-agricultural growth, expected to reach 3.6% in 2025 and 3.9% in 2026, with growth for the agricultural sector bouncing back after a 4.6% contraction in 2024, provided favorable weather conditions. The central bank reiterated that it would continue to monitor developments closely, making adjustments as necessary to support the economy.

The central bank’s actions reflect its ongoing commitment to supporting economic growth, while ensuring price stability and addressing both domestic and international economic challenges.