Money and bond markets, the results of the first week of September

The money market showed signs of balance between August 30 and September 5, a period marked by the approach of the monetary policy meeting of Bank Al-Maghrib (BAM) for the third quarter of 2024, according to the latest report from Attijari Global Research (AGR).

The weighted average rate (WAR) remained aligned with the key rate, set at 2.75%. AGR, in its weekly note “Weekly Hebdo Taux – Fixed Income”, also highlights a slight increase in MONIA rates (Moroccan Overnight Index Average), which rose by 2 basis points compared to the previous week, reaching 2.71%.

Regarding liquidity injections by Bank Al-Maghrib, the institution increased its operations this week. The total of its interventions, through main and long-term operations, reached 145 billion dirhams (MMDH), against 148.7 MMDH the previous week.

Specifically, 7-day advances fell to MAD 61.3 billion, reflecting a decrease in supply pressures, marking an end to the tensions observed in the previous quarter. Furthermore, longer-term BAM injections, via repo and secured loans, remained stable at MAD 83.7 billion.

Bond market: 13-week rate at its lowest level since November 2022

In the bond market, the 13-week bond yield reached its lowest level since November 2022, as indicated by AGR in its analysis for the period from August 30 to September 5.

This decline comes in the context of a continued reduction in investors’ profitability requirements on short- and medium-term (CMT) securities. Yields on 13-week, 52-week and 2-year bonds have fallen by 3 to 10 basis points, reaching their lowest levels in more than 20 months, below the key rate of 2.75%.

Investor demand during this auction session remained moderate, amounting to 4.1 billion dirhams, with a Treasury subscription limited to 2.2 billion dirhams, representing a satisfaction rate of 52%. Over the month, the Treasury covered approximately 39% of its financial needs announced at the beginning of the period, with a cumulative fundraising of 4.8 billion dirhams out of a total of 12.3 billion dirhams, leaving a balance to be financed of 7.4 billion dirhams.

The outlook for the end of 2024 remains favourable, with the creation of a solid liquidity cushion for the State treasury and the possibility for the Treasury to raise funds internationally on advantageous terms. These factors should support the continuation of the downward trend in primary rates.

LNT