Increased demand for cash during Eid al-Fitr reinforces fears of a “cash shock”

Agadir 24 | Agadir24

The demand for cash increases significantly during holiday periods and various occasions, such as Ramadan, the summer vacation season, the return of Moroccan immigrants from abroad, and school admission.

During these periods, customers withdraw cash from their accounts in order to finance their purchases in cash, which increases the pressure on the windows, especially if this coincides with a holiday and a period of bank closure.

In this context, a group of citizens expressed their fears that Eid al-Fitr would cause a cash shock to bank customers.
This was reinforced by a report issued by the Professional Group of Moroccan Banks, in which it stated that work would be suspended, exceptionally, next Friday if the holiday falls on Wednesday.

In response to this issue, Salim Shehabi, a financial and banking consultant, confirmed that the bank liquidity situation is regarding to get worse, given the multiple appointments that cause great pressure on banknotes.

Shihabi explained that the popularity of “cash” jumped to 394.8 billion dirhams at the end of last February, which increases the risk of monetary inflation due to the increase in the volume of the currency in circulation at a rate exceeding the growth of the gross domestic product.

The same spokesman added that banks face a real dilemma during the coming period between the legal coercion that imposes on them to give customers their money deposited in current bank accounts immediately and curbing the bleeding of “cash” in the windows.

The financial advisor stressed that performance using bank cards through the windows themselves is still at weak levels, as these cards are still being used by customers to withdraw banknotes in the first place.

This comes at a time when banks were unable to reduce the number of automatic windows, despite the closure of 145 banking agencies during the past year, which jumped to 8,176 bank windows, an increase of 0.2 percent, while the city of Casablanca acquired the largest percentage of windows with 1,593 windows.