Morocco to resume the reforms of the exchange rate regime

Morocco is able to resume the reforms towards a more flexible exchange rate regime at the first sign of an external shock, such as a surge in oil prices, said Bank Al-Maghrib Governor Abdellatif Jouahri on Friday during an interview in Washington organized by the International Monetary Fund (IMF), says the media Bloomberg.

The country paused the reforms for a more flexible exchange rate at the beginning of the year, due to efforts in 2018 to correct the deterioration of its finances. After the extension of the fluctuation band of the Dirham a year ago, the authorities had to wait until at least 2020 before considering further easing their grip on the currency, Bloomberg explains.

After the first phase of reforms last year, the central bank will continue to maintain the Dirham in a Euro-Dollar basket with a ratio of 60% to 40% respectively, the governor said. The next step is to further widen the range of fluctuation at the first sign of external shocks on the country’s economy, he said.

«For us, the reform aims to absorb external shocks and boost Morocco’s competitiveness», said Abdellatif Jouahri, adding that the IMF felt that the time was right for advancing reforms.