IMF encourages Morocco to take next step in currency floating

Source: Xinhua

The International Monetary Fund (IMF) has encouraged the Moroccan authorities to take the next step in its plan for the gradual floating of dirham currency, local media reported on Wednesday.

This encouragement came at the end of an IMF staff team's visit to Morocco from March 19 to April 3 to make discussions with the Moroccan authorities.

Citing an IMF statement, the Moroccan financial daily l'Economiste reported that the IMF staff expressed its full support to Moroccan authorities' intention to gradually transit to a more flexible exchange rate regime, adding that it should improve the economy's ability to absorb external shocks and maintain its competitiveness.

In mid-January 2018, Morocco started the gradual floating of its currency, raising the official band of dirham's fluctuation to 2.5 percent above or below the official rate from the previous 0.3 percent.

The Moroccan authorities remain cautious about the next phase of floating dirham.

In a joint letter to IMF director last January, Moroccan Minister of Economy and Finance, Mohamed Benchaaboun, and Governor of the Moroccan central bank, Abdellatif Jouahri, said the Moroccan authorities intend to move to the next step of this reform "for preventative purposes as soon as economic conditions allow them to do so."