Moroccan Banks Facing Liquidity Crisis

Central Bank of Morocco

If one listens to former finance minister Oualalou, the Moroccan financial sector is sheltered from the global financial crash. Not so if one looks at the current credit crunch facing Moroccan banks.

For months now, Moroccan banks have been dealing with a market with constantly growing credit needs, but money supply has been severely constrained. In the third quarter of 2008, the Moroccan banks’ need of cash rose to MAD 11.7 billion, up from MAD 8.4 billion the previous quarter, forcing the central bank, Bank Al-Maghrib to intervene to raise money and pump it back into the system to keep it afloat. For central bank officials, this state of affairs has nothing to do with the current global economic meltdown. Officials argue that the Moroccan financial sector has been solid and the liquidity crisis has bee a constant phenomenon, not in relations to the ongoing global recession. Continue reading here.