The Minister of Economy and Finance speaks in the parliament on the reform of the exchange rate regime : 18/01/2018

The Minister of Economy and Finance speaks in the parliament on the reform of the exchange rate regime

Mr. Mohammed BOUSSAID, Minister of Economy and Finance, and Mr. Abdellatif JOUAHRI, Wali of Bank Al-Maghrib, held, Wednesday January 18th 2018, a joint meeting of the Committee of Finance and Economic Development in the House of Representatives and the Committee of Finance, Planning and Economic Development in the House of Councilors, characterized by the presence of the presidents of both Houses, respectively Mr. Habib El Malki and Mr. Hakim Benchamach. This meeting was devoted to the reform of the exchange rate system.

During this meeting, the Minister of Economy and Finance stated that the reform of the exchange rate regime is a step towards the strengthening of the positioning of the Moroccan economy at the international level.

“This reform stresses the achievements made at the level of the macroeconomic framework, structural and sector-based reforms and the opening of the Moroccan economy to the outside world”, specified Mr. BOUSSAID. He added that this measure will support the structural changes in the national economy, particularly those relating to the diversification of sources, its openness and its integration into the international economy.

The Minister stressed that the current economic situations of the Kingdom are appropriate to initiate this reform, taking into account the soundness of the national financial sector and the strength of the macroeconomic indicators, in particular the appropriate level of foreign exchange reserves and the continuous control of inflation. He explained that the first phase will be used as an indication to the actors to begin this change, noting that the fluctuation of the exchange rate in a band limited to ± 2.5% remains low, especially compared to the current fluctuation rates (in 2017 the dirham rose by 7.6% against the dollar and dropped by 5.1% against the euro). This transition would not significantly affect the level of inflation and therefore the purchasing power of citizens.

Moreover, the Minister asserted that the Kingdom will adopt a gradual and cautious approach and a communication strategy appropriate to each phase of the reform, by involving all economic actors, to encourage them to actively take part in this project and enable them to gradually familiarize with this new system and better manage the associated potential risks. He indicated, in this regard, that the transition from one phase to another will depend on the positive assessment of each phase and the existence of the necessary conditions to ensure the success of the next step.

Mr. BOUSSAID noted that the coordination with Bank Al-Maghrib will be tightened to monitor the evolution of the dirham exchange rate and to take all appropriate steps for this transition. He added that the Government will pursue structural and sector-based reforms to strengthen the competitiveness of the national economy and sound macroeconomic policies to achieve this reform.