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Morocco is in an advantageous position to take the next step to a more flexible exchange rate for the dirham, Finance Minister said Thursday in a press conference.
«It is up to the finance ministry and the central bank to agree on when to move to the second step», Mohamed Benchaaboun said, adding that Morocco is ready to move forward with its dirham flexibility approach.
According to Reuters, Morocco is planning to take the second step in its first phase of achieving a greater exchange rate flexibility.
Benchaaboun’s statement goes hand in hand with that of Morocco’s Central Bank Governor Abdellatif Jouahri. Earlier in February, Jouahri said that the Kingdom is planning to switch back to a more flexible-exchange regime, allowing the exchange rate to be determined by supply and demand.
«The timing is the question and should be well chosen», Jouahri added.
For the record, Morocco took a break earlier in 2019 from its gradual push for a more flexible exchange rate, citing deteriorating finances.
The Kingdom adopted a more flexible exchange rate in 2018 to boost the competitiveness of its economy, but it realized that it had to wait until 2020 to further loosen the plan.
During the last couple of years, the IMF has been pushing Morocco to ensure the transition to a greater exchange rate flexibility.
In one of its recent reports, the agency urged the Kingdom to «use the current window of opportunity to continue this reform», which will «help the economy absorb potential external shocks and remain competitive».
