The Bank of Morocco (Bank al-Maghrib), the central bank, has the sole privilege of note issue. It is required to maintain a gold or convertible-currency reserve equal to one-ninth of its note issue. The Ministry of Finance is responsible for the organization of banking and the money market. In February 1996 the central bank gave clearance for banks and finance houses to issue corporate bonds. Consumer credit companies are expected to be the first to take advantage of the new ruling. Other reforms scheduled for 1996 included a secondary market in public debt, an interbank foreign exchange market, and the launch of privatization bonds and global depository receipts (GDRs). As of 1997, only the interbank foreign exchange market had been implemented. Commercial banks were permitted to buy and sell foreign currency at market-determined rates, where previously foreign exchange rates were fixed on a daily basis by the central bank. The dirham was fully convertible in 1999.
Commercial banks must have 51% domestic majority ownership; some foreign banks were Moroccanized in 1975. There were 16 commercial banks in 2002, most of which were partly owned by European banks. The largest private commercial bank is the Banque Commerciale du Maroc (BCM), which is 32% owned by foreign banks, including Banco Central Hispano, Credito Italiano, and Crédit Commercial de France. Another important commercial bank was Wafa Bank, with a 10% share of deposits in 1999. Wafa Bank owned half of a year 2000 banking venture with Senegal to offer services to ECOWAS countries. The three largest banks account for over 60% of banking assets and deposits.
Public sector financial organizations specializing in development finance include the National Bank for Economic Development, Moroccan Bank for Foreign Trade, National Agricultural Credit Bank, and Deposit and Investment Fund. Also instrumental in development finance is the Bureau of Mineral Exploration and Participation, which has participatory interests in the production of all coal, petroleum, lead, and manganese.
The National Bank for Economic Development, established in 1959, has been particularly active in financing manufacturing. The Agricultural Credit Bank makes loans to credit organizations, public institutions, and cooperatives. Private individuals borrow from local agricultural credit banks or from the agricultural credit and provident societies.
The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $22.1 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $29.6 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 4.44%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 4.71%.
The stock exchange (Bourse des Valeurs) at Casablanca, established in 1929, handles mostly European and a few North African issues. The Casablanca stock market underwent a program of reform designed to attract increased interest from overseas and local investors. In 1993 the government approved legislation to turn the bourse into a private company with stock held by brokers, to create new stock-trading bodies and to channel the funds of small savers into share issues and unit trusts. In 1995, France agreed to finance further improvements, modeling the exchange on the Paris bourse and introducing computerization. In 2001, the stock exchange had 55 companies listed and a $9.1 billion capitalization.