2023-05-11 19:18:42
The evolution of bond rates in Morocco is dependent on the orientation of BAM’s monetary policy during the second half of the current year.
“After 3 successive key rate hikes since last September, the institution seems determined to act to reduce inflation. In our view, BAM would logically maintain the restrictive monetary course in 2023”, indicate the AGR analysts in their latest research report devoted to the rate market in Morocco.
The evolution of bond rates in Morocco is also dependent on the materialization of external financing provided for in the 2023 Finance Law, underlines the same source, noting that the international exit of 2.5 billion dollars is in line with the external financing planned under the finance law at 60 billion dirhams (MMDH). The completion rate for external drawings stands at 50% at the end of March 2023, compared to an average of 60% over the 2021-2022 period.
For a change in bond rates, there is also a question of the orientation of financing needs at the end of 2023. Despite good budgetary control, Treasury financing needs should increase to 20 billion dirhams/month by the end of the year. Originally, the increase in Treasury issues to around 180 billion dirhams in 2023. This development is explained by the new Treasury issuance strategy during Q4-2022 focused on the short-term compartment.
It is also regarding the continued return of investors’ appetite for treasury bonds. The rise in yields on the bond curve is still not able to restore real rates to positive territory, given the persistence of inflationary pressures.
Indeed, the appreciation in demand for treasury bills in Q1-2023 should be put into perspective. This took place in a context of absence of innovative financing from the Treasury and an improvement in the liquidity deficit of the banking system.
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