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IMF: The situation is conducive to resuming the “floating” of the Dirham with expectations of a decline in inflation

Roberto Cardarelli, head of the International Monetary Fund mission in Morocco, said, “The current circumstances are appropriate for the Bank of Morocco to return to projects such as the gradual liberalization of the dirham exchange rate,” adding that “floating the dirham is a complex process, requiring major technical work in partnership with the Central Bank, specifically with regard to preparing Small, medium and very small enterprises to deal with the new changes in the exchange rate.”

The Bank of Morocco had been involved in the process of liberalizing the dirham exchange rate since 2016, at a rate of 0.5 percent up and down, before moving to 2.5 percent, then 5 percent currently.

Cardarelli added, in response to a question from Hespress regarding the criteria and conditions adopted by the International Monetary Fund in order to propose progress on the path of floating the dirham to the Bank of Morocco, during a press conference held remotely today, Wednesday, that “inflation targeting has become subject to temporal variables that require providing a set of tools at a glance.” short and medium term,” he explained, explaining that “the Fund’s management does not impose conditions or standards in this regard, and does not ask the Central Bank to liberalize the dirham exchange rate, but rather presents its opinion regarding a transitional program in which the bank has been involved for years, and the current circumstance remains favorable for its resumption, especially with expectations.” Inflation will decline to 2% during the coming period.”

The head of the International Monetary Fund mission in Morocco, in the context of his diagnosis of the situation of public finances, revealed expectations of an acceleration of investments during the coming period, in relation to the progress of the government’s plans in the water and energy sectors, as well as the infrastructure related to the project to receive the 2030 World Cup finals, highlighting that the external situation remains Comfortable, given the improvement in the current deficit situation and the stability of foreign exchange reserves, stressing that the Moroccan economy has shown resilience and resistance in the face of external shocks, especially the Corona pandemic and drought.

The same official praised the work of the Bank of Morocco in managing monetary policy, especially by keeping the main interest rate unchanged since March of last year, stating that the Ministry of Economy and Finance is silently on a good track in managing its obligations related to reducing the deficit by 1 percent of the gross domestic product. The government’s involvement in implementing important reforms, especially social protection and support directed to vulnerable groups, by improving targeting methods through the unified social registry, which ensures that eligible groups receive support, in addition to reforming the value-added tax, which has had a positive impact on incomes and has helped significantly. Great for reducing deficits, filling margins, and preparing for future shocks.

Cardarelli called on the government to continue implementing its energy projects, especially water, by adopting a tariff that is compatible with the real cost of this material, and increasing awareness about the need to rationalize its exploitation, and the same applies to electricity, by encouraging the private sector to produce, and moving another step towards implementing reforms. In the labor market, especially with the negative impact of drought on job opportunities.

Source : Hespress.


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