Moroccan Finance Minister Nadia Fattah Al-Alawi said today, Monday, that Morocco does not intend, at the present time, to make any changes to the range in which currencies are traded.
Morocco began gradual reforms to the currency market in 2018, but it has not made any major changes since 2020, when it expanded the dirham’s trading range against hard currencies to 5% up and down from a reference price, compared to a previous rate of 2.5%.
However, many currency markets in developing countries, including Tunisia and Egypt, have been under great pressure over the past 14 months. Egypt conducted 3 major devaluations of the Egyptian pound.
“Despite all the volatility (in the markets) that we witnessed in 2022, the currency remained in the 5% range, so I think we will not change this range,” Alawi told Reuters on the sidelines of the annual City Week financial conference.
“There are some issues around the world and so far I think the 5% range is quite sufficient to move smoothly towards a more flexible regime” when conditions allow.
She said that the support provided by the Moroccan government helped reduce inflationary pressures.
Data this month showed that the consumer price index in the country rose in March by 8.2% from a year earlier, due to the increase in food prices, which jumped 16.1% on an annual basis.
The rise in food prices prompted the authorities to impose restrictions on the export of some vegetables to European and other African markets in an attempt to reduce prices at home, while the government last week abolished the value-added tax on agricultural “inputs”.
“We chose certain measures… I would say it (caused) us to avoid three additional points of inflation that could have affected the population,” Alawi said.