The liquidity needs of banks experienced a marked reduction in 2021, returning to 70.8 billion dirhams (MMDH) on average weekly after 90.2 billion dirhams a year earlier, according to Bank Al-Maghrib (BAM).
This improvement is mainly attributable to an increase of 24.7 billion dirhams in BAM’s foreign exchange reserves, the result in particular of intensive recourse by the Treasury to external drawings and purchases of foreign currencies from banks carried out within the framework of auctions initiated from month of September, specifies BAM in its annual report on the economic, monetary and financial situation. The pressure on bank treasuries was also relieved by the deceleration of fiduciary money in circulation, which increased by 26.4 billion dirhams in 2021 instead of 44 billion dirhams in 2020, adds the Central Bank.
Taking into account this change in banks’ need for liquidity, BAM has adjusted the volume of its interventions bringing it down to 82.9 billion dirhams in 2021 on a weekly average after 96.3 billion dirhams in 2020, indicates BAM. By instrument, the Bank granted average amounts of 1.2 billion dirhams, after 29.3 billion dirhams in 2020, through repurchase agreements delivered at one and three months, and 26.8 billion dirhams, against 20 billion dirhams, under form of one-year guaranteed loans as part of financing support programs for VSMEs, micro-credit associations and participatory banks.
With regard to 7-day advances, BAM continued to meet all the requests expressed by the banks, granting a weekly average of 34.1 billion dirhams after 42.5 billion dirhams. It also carried out four exchange swap transactions for a total of 6.7 billion dirhams and was requested five times for 24-hour advances totaling 11.5 billion dirhams. Increased recourse to instruments of longer duration resulted in an extension of the average duration of the Bank’s interventions, which rose from 33.3 days to 55.6 days.
The infra-annual analysis shows a gradual attenuation of banks’ need for liquidity during the first three months of the year, going from 66 billion dirhams to 61.2 billion dirhams on a weekly average, reflecting the improvement in BAM’s foreign exchange reserves. Between the months of April and August, this deficit experienced an accentuation, reaching a peak of 86.1 billion dirhams during the month of August, in connection in particular with the seasonal expansion of fiduciary money, according to the report. Driven by the rise in foreign exchange reserves and to a lesser extent by the reflux of cash, the need gradually eased over the rest of the year, falling to 64.8 billion dirhams on average in December.