Morocco holds interest rate at 2.25% amid global uncertainty

Morocco’s central bank has retained its benchmark interest rate at 2.25 per cent, citing a stable inflation outlook despite rising global uncertainties linked to geopolitical tensions in the Gulf.

The decision was announced in a statement following the bank’s quarterly policy meeting on Tuesday.

The apex bank noted that while the impact of the Middle East conflict is expected to remain limited under a short-lived scenario, prolonged or escalated tensions could pose risks through higher energy prices and external account pressures.

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**What the Moroccan central bank is saying **

The central bank said inflation is expected to remain moderate despite global economic uncertainties.

• Inflation is projected to remain stable at 0.8 per cent in 2026.
• It is expected to rise slightly to 1.4 per cent in 2027.
• The impact of the Middle East conflict is expected to remain “relatively contained” under a baseline short-term scenario.
• However, risks could intensify if the conflict becomes prolonged or escalates further.

The bank emphasised that global developments, particularly energy price movements, will remain key factors influencing the country’s economic outlook.

**More insights **

The central bank revised its economic growth outlook upward for 2026, supported by improved agricultural output.

• Growth is projected at 5.6 per cent in 2026, up from 4.8 per cent recorded last year.
• The improvement is largely attributed to stronger farming output following abundant rainfall.
• Cereal production is expected to reach 8.2 million metric tons this year.
• Growth is forecast to slow to 3.5 per cent in 2027, assuming average agricultural conditions.

The improved outlook reflects the significant role of agriculture in Morocco’s economic performance.

**Get up to speed **

Despite stronger growth prospects, external sector pressures are expected to increase.

• The current account deficit is projected to widen to 3.1 per cent of GDP in 2026, up from 2.3 per cent last year.
• The increase is linked to higher energy import costs.
• However, revenues from phosphate and fertiliser exports, remittances, tourism and foreign direct investment are expected to rise.
• Foreign exchange reserves are projected to reach 482 billion dirhams (about $51.5 billion) by 2027, covering approximately 5.5 months of imports.

These projections highlight both the opportunities and vulnerabilities in Morocco’s external sector.

**What you should know **

Recent monetary policy decisions across African economies reflect varying responses to inflation and growth dynamics.

• In February, Nairametrics reported that the Bank of Uganda (BoU) retained its benchmark Central Bank Rate (CBR) at 9.75%, maintaining its accommodative monetary policy stance amid a stable inflation outlook.
• Also, the Bank of Zambia reduced its benchmark interest rate for the second consecutive meeting, cutting it to 13.5% from 14.25% as inflation shows clearer signs of moderation.
• The Central Bank of Nigeria (CBN) reduced its Monetary Policy Rate to 26.5 per cent from 27 per cent.
• These moves reflect efforts by central banks to balance inflation control with economic growth.