These external pressures were gradually reflected in production costs and local products, and turned into internal pressures, exacerbated by internal supply shocks that affected certain foodstuffs due to the successive years of drought and water stress experienced by Morocco, added the Moroccan official. In this context, she noted, Bank Al-Maghrib (Morocco’s central bank) changed the orientation of its monetary policy for the first time in 14 years, starting in September 2022, by raising the key interest rate three times in a row by a total of 150 basis points to 3%. This restrictive approach to monetary policy, in line with the global trend among central banks, prevented inflation forecasts from worsening in order to facilitate their return to desired levels, she explained. Referring to the government’s fiscal policy, the official noted that in order to contain the negative effects of economic shocks, including inflationary pressures, emergency and targeted budgetary measures had been adopted to mitigate the effects of rising prices on families’ purchasing power. The government intervened at the very first signs of inflation with a series of urgent measures, notably through continuing to subsidize certain basic products by the Compensation Fund and granting exceptional support to professionals in the road transport sector, she recalled.

Source: The North Africa Journal May 24, 2024 11:45 UTC