EXECUTIVE SUMMARY
On the sidelines of its 3rd monetary policy meeting in 2022, Bank Al-Maghrib decides to raise its Key Rate by +50 BPS to 2.0% for the 1st time since 2008. The institution finally leaned in favor of support price stability in Morocco. This monetary reversal is in line with our initial scenario expressed in June 2022 (see June 2022 Key Rate). Recall that the market consensus was mixed regarding the KR expectations, as the results of our last survey carried out in September 2022. (See Q3-22 Key Rate Survey).
For the first time in 20 years, the Central Bank announces a KR increase of 50 BPS. A scenario similar to its European counterpart during Q3-2022. Indeed, the ECB has surprised the market twice with KR hikes of 50 BPS in July and 75 BPS in September against initial forecasts of 25 BPS and 50 BPS. This decision attests to a change in BAM's perception of the "transitional" nature of inflation in Morocco. From now on, the institution has as a priority the easing of the inflationary pressure which seems to be increasingly sustainable.
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