Rabat - Morocco’s central bank, Bank Al-Maghrib (BAM), has kept the dirham’s permissible exchange rate within 2.25 percent of the set rate.
Rabat – Morocco’s central bank, Bank Al-Maghrib (BAM), has kept the dirham’s permissible exchange rate within 2.25 percent of the set rate.
In a press release after their third quarterly meeting on Tuesday evening, September 25, BAM reviewed the economic situation and its macroeconomic forecasts for the next eight quarters. The bank decided that the current level of permissible fluctuation from the main interest rate, 2.25 percent, is still appropriate and should remain unchanged.
The bank forecasted a decrease to 3.5 percent and 3.1 percent in the economy’s growth rate in 2018 and 2019, respectively. The growth rate in 2017 was 4.1 percent.
“For the first quarter of 2018, the latest national accounts data showed a deceleration in the annual growth from 3.5 percent to 3.2 percent, with value-added agricultural production declining from 14.8 percent to 2.5 percent,” the central bank said.
The growth in production of non-agricultural activities has improved from 2 percent in the first quarter of 2017 to 3.4 percent in the first quarter of 2018, and it is expected to continue rising.
Value-added agricultural production is expected to increase by 5.1 percent overall in 2018 compared to 2017. Assuming 2019 has a normal agricultural season, production will fall by 1.6 percent next year.
Non-agricultural activities are expected to continue to increase, with a growth of 3.3 percent in 2018 and 3.7 percent in 2019.
At the end of 2018, inflation is expected to hold steady at 2.1 percent. In 2019, it is expected to decrease to 1.2 percent.
Bank Al-Maghrib forecasted that Morocco would have a foreign currency reserve of MAD 240.8 billion by the end of 2018, up by 1.2 percent in comparison to the end of 2017. The reserves are sufficient to pay for 5 months and 5 days of imports.
Regarding monetary market interventions, BAM injected, during the week of September 13-19, MAD 69.8 billion into the monetary market to control dirham fluctuation.
During the same period, the dirham depreciated by 0.42 percent to the euro and appreciated by 0.45 percent to the dollar.
