In the latest report, IMF experts recommended that the Moroccan authorities continue to expand the liberalization of the national currency exchange rate “without undue delay”, one year after the Kingdom’s adoption of the first phase of the flexible system.
The IMF said further expansion of the Moroccan dirham’s move “is necessary to protect foreign reserves and make the national economy better positioned to absorb potential external shocks and maintain competitiveness.”
“Reform will encourage export diversification and the development of SMEs, which account for 90 percent of the Moroccan construction fabric, which will help create jobs and income for the poor and the middle class,” the report said.
The report published a letter sent by Mohamed Benchaaboune, Minister of Economy and Finance, and Abdellatif Jouahri, Governor of Bank Al-Maghrib, to Christine Lagarde, Director General of the International Monetary Fund, pointing out that the Moroccan authorities intend to move to the next stage “when economic conditions permit.”
In their letter, Benchaaboune and Jouahri confirmed that the transition would help the national economy; but they did not mention a specific date for expanding the dirham exchange rate beyond the current range of 2.5 per cent up and down, instead of the 0.3 per cent previously applied to the fixed system.
The IMF report also forecast that Morocco’s growth rate will gradually improve over the coming years, as well as control of the budget deficit thanks to increased tax revenues and thus the success of reducing the public debt ratio to GDP.
The report comes weeks after the IMF approved an agreement with Morocco under the $ 2.97 billion “Prevention and Liquidity Line” for two years, which will be put on Morocco’s side in case of a crisis. It has already received three previous agreements but has not been used.
Morocco is committed to implementing a number of reforms, especially in education, governance and the labor market, and to continue improving the business climate to increase growth and reduce high levels of unemployment, especially among young people and women.