NewsNorth AfricaMorocco's currency move step in right direction - IMF

Tue,20Feb2018

Posted on Tuesday, 30 January 2018 16:47

Morocco's currency move step in right direction - IMF

By Reuters

Tourists look at a wool dying shop in the souk of Marrakech, in this March 10, 2003 file photo. Photo: ABDELJALIL BOUNHAR/AP/SIPAMorocco's new more flexible hard currency system is a step in the right direction to make the kingdom more attractive to investment and turn it into a financial hub for Africa, a senior IMF official said on Monday.

Two weeks ago, the North African country launched a more flexible foreign exchange system, part of free-market reforms recommended by the International Monetary Fund to protect the economy against external shocks and safeguard its reserves.

"It's a reform that goes in the right direction," Jihad Azour, director of the IMF Middle East and Central Asia department, told Reuters on the sidelines of an IMF economic conference in Marrakech in Morocco.

On the right track

"It allows Morocco to be ... more attractive for investors and to play its full role as regional financial centre especially the with ambition of Morocco to service Africa in terms of financial services," he said.

Moroccan officials have said they don't plan to follow the path of Egypt which opted for a full float in one go.

"I think their path of their reform has been designed with ... our support. We were very much satisfied with the way they did it," Azour said when asked whether Morocco should do more currency reforms.

He said the lifting of most fuel subsidies and other reforms had allowed Morocco to boost economic growth which had been forecast at 4.5% for last year.

For 2018 growth would be also positive, he said. Morocco has forecast GDP growth to slow to 2.8%  this year though officials have said the currency move could add 0.2%.

Morocco is among the countries in the region that is very advanced in their reforms, he said. "They are on the right track. This is paying off."

 



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