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Morocco’s Foreign Currency Reserves to Reach MAD 310 Billion by End of 2021

25 Mar 2021

Rabat – On Tuesday, the governor of Bank Al-Maghrib (BAM-central bank), Abdellatif Jouahri, said that Morocco’s official reserve assets (ORA) are expected to reach MAD 310.3 billion ($34.4 billion) by the end of 2021. The reserve assets will ensure Morocco’s imports of goods and services for six months and 25 days.

Jouahri shared the figures during a press briefing held via teleconference at the end of the first quarterly meeting of the BAM board for 2021.

The reserves in foreign currency are forecasted to increase to MAD 316.8 billion ($35.18 billion) for next year which will ensure Morocco’s imports of goods and services for seven months.

In 2020, the ORA reached MAD 320.6 billion ($36.5 billion), equaling seven months and 16 days of imports. The reserves were impacted by the increase in external drawings, among other things, recalled Jouahri.

The Foreign Direct Investment (FDI) receipts are expected to stand more or less at 3.2% of gross domestic product (GDP) after falling to 2.4% in 2020.

With the assumption of a gradual increase in tourist arrivals in the second semester of 2021, the governor of BAM noted that travel receipts will experience a moderate increase while remaining well below the pre-crisis levels.

According to the governor, the real effective exchange rate appreciated by 0.8% in 2020, but should depreciate by the same rate in 2021 and by 0.6% in 2022.

The depreciation is mainly related to the level of domestic inflation that is below that of partner countries and commercial competitors, he explained.

Inflation is projected to slightly increase from 0.7% in 2020 to 0.9% in 2021 and 1.2% in 2022, according to Bank Al Maghrib’s forecasts.

During the meeting, the BAM Board considered that the stance of monetary policy remains largely accommodative, ensuring adequate financing conditions. It noted that the current policy rate is appropriate and decided to keep it unchanged at 1.5%.

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