Morocco’s central bank is expected to hold the key interest rate steady on Tuesday, Bloomberg financial analysts, with prior readings of the bank’sin policy showing a cautious approach to push for economic growth despite uncertainty.
On Tuesday, the Chief of Morocco’s central bank alongside the board of directors will reach a decision on the key interest rate – a percentage they have not changed since June 2020.
The Central bank has time and time again argued that raising the cost of borrowing will add more financial pressure to those already burdened by the rising cost of living. Cautious, the Board reasons that its accommodative monetary policy is essential to reinforce a weakened economy.
Raising the interest rate to curb inflation would also mean impeding private investment and potential social instability.
Inflation is projected to reach 5.3% for the whole of this year before decelerating to 2% in 2023, while its underlying component would reach 5.2% in 2022 and then return to 2.5% the following year.Despite projections, the inflation experienced in Morocco is largely exogenous and cannot be controlled amid uncertainty over the Ukraine war and broken supply chains.
“We will reassess the situation if the internal elements start to weigh significantly on the inflation trajectory,” Abdelatif Jouahri, wali of Bank Al-Maghrib told reporters during the last Board meeting he held in June.
By September 2020, an increase in interest on domestic debt (+1 million dirhams) and a modest decrease in interest on foreign debt, interest on debt increased by 940 million dirhams to 23.4 million dirhams (-61 million dirhams).
Other economic indicators also show positive signs with tourism receipts climbing by 179.1% and expected amount to 36.7 billion dirhams by the end of July 2022
add your comment
Terms of publication : Not to offend the writer, people, sacred things, or attack religions or the divine self, and refrain from racist incitement and insults.