Morocco Maintains Current Dirham Exchange Rate Policy Amid Regional Currency Pressures

The past year has been marked by strong pressure on the currencies of emerging markets, including two North African countries, Tunisia and Egypt, which have undergone three major devaluations. Despite this instability, the minister recalled that the Moroccan currency has remained within the 5% range, stating that Morocco will maintain the same pace for its reforms.

The subsidies put in place by the Moroccan government have helped limit inflationary pressures. However, the latest data shows that the consumer price index rose 8.2% in March compared to the previous year, driven in particular by a 16.1% increase in food prices. To deal with this situation, the authorities have restricted the export of certain vegetables to European and African markets in an attempt to reduce prices on the local market, with some success. In addition, last week the government removed the value-added tax on agricultural "inputs" to help relieve inflationary pressures.

To avoid additional inflation that could have negatively impacted the population, Nadia Fettah Alaoui indicated that the government has chosen targeted measures, estimating that the current 5% is largely sufficient to move towards a more flexible regime gradually when conditions allow.