Morocco’s Central Bank Maintains Key Interest Rate Unchanged at 2.25%

Morocco’s Central Bank, Bank Al Maghrib, kept its benchmark interest rate unchanged at 2.25% following its board meeting on Tuesday, December 19.

The Bank said inflation was expected to reach 0.7 % on average at year end, down from 1.6 percent in 2016.

The bank also revised down economic growth to 4.1% this year from a previous estimate of 4.3%, and to 3% from 3.1% in 2018, assuming medium agricultural output.

In the medium term, inflation is projected to rise, but would remain at moderate levels, the bank said, adding that it would stand at 1.5 percent in 2018 and 1.6 percent in 2019.

The Bank noted that imports rose by 6.7%, mainly due to a 28.6% increase in the energy bill.

Travel receipts and expatriates’ remittances were up 6.5 percent and 3.0 percent, respectively, the bank said, highlighting an inflow of GCC grants of about 8 billion dirhams leading the current account deficit to reach 3.6 % of GDP at year’s end, down from 4.4% in 2016.

On public finance, the board noted that budget implementation in the first ten months of 2017 resulted in a deficit of 30.4 billion dirhams, down 5.1 billion compared to the same period of 2016, while Receipts grew by 4.1 percent

Considering these developments, fiscal deficit would reach 3.5 percent of GDP at year’s end, the Central bank said, noting that budget deficit would ease to nearly 3 percent of GDP.

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