Morocco cuts commercial banks reserve rate to 8 pct
Morocco’s Monetary Policy Council has lowered commercial banks’ reserve rate by 2.0 percentage points to 8 percent to ease a liquidity crunch. Meanwhile, the Council decided to leave the benchmark interest rate the same at 3.25 percent, as a result of slowing inflation. The last time when the bank had cut the rate was in March this year when the rate was trimmed by 0.25 percent point to 3.25 percent.
Earlier in June, The Council had trimmed the reserve by two percentage points to 10 percent before cutting it to 8 percent this time- its lowest in 50 years. In news of interest for overseas property investors, the bank said it expects inflation would remain low from now until the fourth quarter of 2010.
According to the press release from the bank, “Noting the scope and sustained nature of liquidity shortage on the money market and taking into consideration the outlook of liquidity factors, it decided to reduce the required reserve ratio by 2 percent to 8 percent as of October 1, 2009. ”
The Central Bank Governor Abdellatif Jouahri said the council could reduce the reserve rate further when it meets later in December. The Central Bank expects Morocco’s economic growth up by 6 percent this year, almost the same growth rate as the previous year, mainly on a strong performance of the key farming industry, Jouahri added. But he urged business and government leaders to step up reforms to put the country on a stronger path of growth.
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