Wednesday 20, June 2018 by Kudakwashe

Morocco keeps benchmark interest rate unchanged

 

The central bank and the International Monetary Fund said the country's foreign reserves allow for a smoother transition to a more flexible exchange system

  

Morocco’s Bank Al-Maghrib left its interest rate at 2.25 per cent and said it saw no need to intervene in the currency market, with the dirham's value stabilising in a more flexible exchange-rate system.

Abdellatif Jouahri, Bank Al-Maghrib, said no intervention in the currency market was necessary as pressure on the dirham had eased after a more flexible foreign exchange system was created in January.

Inflation, driven mainly by food prices, is expected to reach 2.4 per cent in 2018 before easing to 1.4 per cent in 2019, the bank said in a statement.

Economic growth was forecast at 3.6 per cent in 2018, based on expectations of a cereals harvest of 9.82 million tonnes this year. Gross domestic product growth is expected to slow to 3.1 per cent in 2019.

The dirham is traded in a currency basket in which the euro has a weight of 60 per cent and the dollar 40 per cent.

Morocco's new exchange-rate system lets the dirham trade against hard currencies in a five percent band, 2.5 per cent to either side. It had traded 0.3 per cent either side.

The current account deficit would hover around 4.1 per cent of GDP at the end of the year and 3.6 per cent in 2019, reported Reuters.

 

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