Significant Increase in US Debt Holdings by Morocco
In a remarkable development reflecting the growing financial ties between Morocco and the United States, the value of Moroccan investors' holdings in American treasury securities has surged by more than 10 billion dirhams within a mere four-month period. By the end of August, these holdings reached an impressive 47.66 billion dirhams, a substantial increase from 37.37 billion dirhams recorded in April. This represents a notable growth rate of 27.6 percent based on comparisons between the two months, amidst a continuous rise in the financial assets attributed to Morocco in the US public debt market.
Recent data released by the US Treasury Department, as part of the International Capital Flows (TIC) statistics, indicates that the value of Moroccan-related holdings in US debt climbed to approximately 4.906 billion dollars by the end of August, up from 4.777 billion dollars in July. This monthly increase amounted to 129 million dollars, or around 1.25 billion dirhams, reflecting a growth rate of 2.7 percent, marking the fourth consecutive monthly rise in this sector.
Trends and Implications for Morocco’s Financial Landscape
The data further illustrates a rapid acceleration in the growth of Morocco's portfolio of US debt since April, when the value was recorded at 3.846 billion dollars. This figure rose to 4.181 billion dollars in May, followed by 4.603 billion dollars in June, and finally reaching 4.777 billion dollars in July, accumulating a total increase of approximately 1.06 billion dollars during this timeframe. It is important to note that the recorded holdings comprised various types of US treasury bonds and bills with different maturities, evaluated at market prices at the end of each month. Consequently, the fluctuations in their values are closely tied to buying and selling activities, as well as the settlement of maturing bonds, in addition to price volatility in the financial markets.
It is essential to understand that this increase does not necessarily imply a corresponding inflow of new investments; rather, it may partly result from the revaluation of existing securities within investment portfolios, influenced by bond price movements and yields. The available data does not allow for a precise determination of the actual volume of net purchases made by investors residing in the Kingdom. The holdings attributed to Morocco encompass potential assets from the state, Bank Al-Maghrib, as well as various banking and financial institutions, alongside private investors residing in the country. However, the specific shares of each entity cannot be distinctly identified due to the classification system employed by the US, which is based on the residence of the investors or financial intermediaries declaring the assets.
The US Treasury Department acknowledged the limited geographical distribution of these holdings, particularly in cases where bonds are held by financial institutions or custodians located in other countries. In such scenarios, the assets may be attributed to the country where the custodian institution is located, rather than to the actual resident owner of the assets. The rise in the value of Morocco's financial portfolio coincides with a notable increase in the official reserves of Bank Al-Maghrib, which amounted to 515.7 billion dirhams as of October 2, representing a 23 percent year-on-year increase, according to the latest data from the central bank.
While the published data does not specify the nature of the relationship between the evolution of the Kingdom's official reserves and the increase in holdings of US debt securities, there is a lack of detailed information regarding the distribution of these assets by the holding institutions and the investment instruments employed. This is particularly significant given that the US statistics encompass both public and private investors. On November 18, the US Treasury Department is expected to release data for September, which will reveal whether the upward trend in Morocco's holdings of US public debt securities continues, as their value approaches the five billion dollar threshold, having increased by over one billion dollars since April.
As reported by hespress.com.
