Reducing interest rates for the second time in two months.. What do individuals benefit?

For the second time in two consecutive months, the Central Bank reduced the main interest rate by a quarter of a percent, coinciding with a similar reduction made by the US Federal Reserve, the day before yesterday, Wednesday, due to the policy of pegging the dirham to the US dollar.

Reducing interest helps banks expand their various financing and supports individuals and companies in obtaining loans at a lower lending cost, such as housing, car, or personal loans. Low interest contributes to reducing monthly installments or allows obtaining a larger loan with the same income.

Low interest also contributes to raising purchasing power, moving the market and increasing investment.

At the level of existing real estate loans, reducing the main interest by 25 basis points will lead to a decrease in the monthly installment by 160 to 180 dirhams for every million dirhams of financing.

On the other hand, reducing the main interest rate leads to a similar reduction in interest on deposits, which means that individuals will receive a lower return on their savings. However, this does not have much effect in light of the lack of risks associated with keeping financial surpluses in banks compared to other sectors and other investment channels.

In general, the low interest on various financing gives banks in the country a greater opportunity to employ high levels of liquidity and meet demand. It also provides individuals with easy loans to pay various obligations.

It is noteworthy that over the past four years, specifically since March 2022, the main interest rate has witnessed 11 increases and eight times of fixation, interspersed with another one-time increase, then the reduction began for the first time last September by 25 basis points, followed by a reduction the day before yesterday at the same percentage.