Abdelatif Jouahri, governor of the Central Financial institution of Morocco, shares his ideas relating to the strengths of the financial institution and the Moroccan economic system.
Editor’s word: This interview was performed previous to latest disasters within the area. Our sympathies are with the individuals of Morocco and Libya as they search to get better.
World Finance: How is Morocco’s economic system in 2023?
Abdelatif Jouahri: The Moroccan economic system reveals indicators of enchancment after a difficult 12 months in 2022. The implications of the battle in Ukraine, mixed with a extreme drought, created vital difficulties for us. Nonetheless, latest knowledge suggests an uptick. However appreciable efforts by the federal government to assist companies, households and social packages, fiscal deficit and nationwide debt stay manageable. The dominion continues to carry out effectively on its exterior stability due to phosphate exports, worldwide tourism and sturdy remittance inflows from Moroccans overseas.
Financial institution Al-Maghrib’s official reserves additionally stay at a cushty stage. Since final 12 months, and like many international locations worldwide, Morocco’s inflation has reached ranges not seen in many years. Financial institution Al-Maghrib has needed to tighten its financial coverage since September 2022, progressively elevating the coverage price by 150 foundation factors. Inflation has began to say no steadily from its 10.1% peak in February however stays above our value stability objectives. Regardless of latest exterior shocks which have uncovered financial vulnerabilities and affected sure inhabitants segments, Morocco has demonstrated outstanding resilience attributed to its financial diversification technique, reforms carried out over the previous 20 years, and proactive authorities actions.
GF: What are the principle challenges you face right now?
Jouahri: Our main problem is battling inflation, and whereas vital progress has been made, fine-tuning financial insurance policies stays a posh activity, particularly in a context of excessive world uncertainty. Extreme tightening may hurt development and employment, however untimely loosening may entail even greater prices. Tightening financial coverage additionally has an influence on general monetary stability. The latest will increase in rates of interest may unveil vulnerabilities and emphasize the necessity for vigilance.
In January 2018, the Moroccan financial authorities additionally progressively transitioned to a extra versatile trade price regime to reinforce resilience and competitiveness. Regardless of latest financial shocks, this transition goes easily, however additional progress is determined by the return of macroeconomic stability and decrease inflation. Local weather change is one other problem affecting the central financial institution’s missions, particularly relating to monetary stability. We should adapt and alter our devices and insurance policies to mitigate the consequences of this new however very tangible actuality. Different issues embody the rise of financial sovereignism, dangers and alternatives related to digital transformation, cybersecurity and knowledge safety. In our view, the distinctive setting we stand in right now requires coordinated financial and financial insurance policies on the nationwide stage and strengthened worldwide cooperation.
GF: What are the important thing strengths of the Moroccan economic system?
Jouahri: Morocco’s principal belongings are political stability and sturdy state establishments. These components are basic pillars of energy in right now’s advanced worldwide and regional geopolitical setting. Morocco additionally has a longstanding dedication to open and outward-looking financial insurance policies. In recent times, we noticed a proliferation of free commerce agreements, new partnerships, and enhanced collaboration with the remainder of the African continent. Over the previous 20 years, Morocco has additionally undertaken substantial investments to develop world-class infrastructure. The nation can now boast a contemporary and environment friendly community of airports, ports, highways, and railways, making it a strategic regional hub.
Over the identical interval, Morocco laid the groundwork for growing its monetary system, giving Financial institution Al-Maghrib the required autonomy and independence to hold out its mission successfully. Consequently, Morocco has a sturdy and resilient banking system that performs domestically and on worldwide markets, with Moroccan banks current in over 36 international locations throughout Africa, Europe and Asia.
Morocco follows an formidable reform agenda mixed with sound macroeconomic insurance policies to encourage funding. The dominion is now a serious world participant in varied sectors, together with the automotive and aerospace industries. Morocco has additionally been on the forefront of the worldwide transition towards renewable energies. Our long-term coverage selections yield outcomes and have made Morocco a reputable worldwide enterprise companion. In the previous couple of months, the dominion was faraway from the grey lists of the Monetary Motion Job Pressure [FATF] and the EU and secured a versatile credit score line from the Worldwide Financial Fund [IMF]. We at the moment are on the point of welcome the IMF and World Financial institution annual conferences in Marrakech.
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