Keeping your money in a current account has a hidden cost: every year inflation is positive, your purchasing power shrinks. If prices rise 4 % and your savings earn nothing, you are 4 % poorer twelve months later — without having spent anything.
Understanding the erosion
Inflation is measured by the consumer price index (CPI) published by HCP. Over recent years in Morocco, levels have moved between moderate phases (around 1–2 %) and higher phases driven by global conditions (energy, food). Over ten years, even an average 2 % inflation rate cuts the purchasing power of an unremunerated deposit by roughly 18 %.
The tools available
Three broad instrument families help offset inflation to varying degrees: equities, bonds, and real assets (property, precious metals). For a Moroccan retail investor working through the Casablanca exchange and OPCVMs, two of those building blocks are the most accessible.
Equities and the MASI
Over long horizons, equities have historically produced a return above inflation. A profitable company can, at least partly, pass cost increases through to selling prices. That is why a diversified equity portfolio remains a structural inflation hedge, provided you keep the long horizon.
In the short term, equities do not mechanically protect against inflation. A rapid energy-price spike can compress margins and weigh on prices for several months. The hedge plays out over 5–10 years, not over 6 months.
Bonds and money-market OPCVMs
Fixed-coupon bonds do not protect against inflation: the coupon is locked in, and the nominal value erodes in real terms if prices rise. A money-market OPCVM whose yield tracks short-term rates can, however, partially reflect a hike in the policy rate in response to inflation.
Inflation-indexed bonds exist in some markets but remain hard for Moroccan retail investors to access. So the MASI and diversified equity OPCVMs remain, in practice, the most usable shield.
Allocation and duration
The cash-versus-equity trade-off is not binary. Keeping a precautionary reserve worth 3–6 months of expenses on a liquid account is still sensible — inflation does eat at it, but liquidity comes first. Anything above that reserve and not earmarked for spending in the next 5 years has a place in productive assets.
In practice
Calculating the real return on your savings once a year (nominal return minus inflation) is a useful exercise. If most of your wealth has produced a negative real return for several years running, that is a signal to rebalance toward growth assets — though not necessarily by moving everything at once.