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Central Bank study reveals shift in payment preferences among Moroccans

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Recent research released by Bank al Maghrebi titled “Cash Estimation” reveals a shift in payment preferences among Moroccans, with cash remaining the go-to method for daily transactions, but  said electronic payment options are gaining ground.

The report highlights a notable surge in demand for the highest banknote denomination, the 200 dirham note, in recent years.

In 2022, the 200 dirham banknote accounted for 75 percent of Morocco’s total cash credit, a stark rise from the 47 percent share it held in 2000.

The analysis, conducted by the trio of researchers, distinctly indicates a substantial increase in cash hoarding in Morocco since the early 2000s. This non-transactional cash demand, initially around 20 percent at the millennium’s onset, fluctuated in 2021, varying between 60 and 80 percent of the circulating banknotes, predominantly the 100 and 200 dirham denominations.

Monthly monetary statistics from the Central Bank of Morocco consistently show an upward trend in cash circulation, contrasting with a stagnant scenario in bank credit and loans extended to the private sector, encompassing families and businesses.

The study’s focus on the issue of hoarding in Morocco aims to estimate the demand for cash not involved in regular transactions, encompassing stored cash amounts, the authors clarify. Their analysis relies on three common academic approaches: the ratio method, the period method, and the seasonal method. The main hypothesis posits that banknotes with higher nominal values (200 and 100 dirhams) are more likely to be hoarded.

Results confirm a rising trend in non-transactional cash, especially in the 100 and 200 dirham notes, aligning with similar research conducted in other countries, as per the study’s summary.

Cautioning about technical limitations in estimation methods, the authors stress the need to interpret these numbers carefully. They note that unofficial banknotes might have longer lifespans compared to those used solely for official transactions, encompassing a different economic cycle.

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