“The IMF has been a great help on the technical side, but to say that it requires us to reform and the timing is wrong”.
It is a consistent criticism addressed to the moroccan public authorities in general, and to the central Bank in particular : the large reforms, such as the migration of the Dirham to a more flexible regime would be dictated by the international monetary Fund.
An assertion that irritates visibly at the highest point Abdellatif Jouahri, Wali of Bank Al-Maghrib. And he did know during his last press conference, Tuesday, march 21.
“We have started to work on this issue as soon as 2010, even here in the central Bank, through an initial study. We did not wait for the IMF to do so. Morocco not has-t-he no frames, of brains, of capacity of reflection and analysis to decide for himself what is good for the economy ?”, said Jouahri.
“The role of the IMF is to accompany us, and at my request, because he has followed all of the experiences of countries that have made transitions to a flexible benefit plan. The IMF has been a great help on the technical side, but to say that it requires us to reform and the timing is wrong,” said he.
Incidentally, reveals the Wali, the IMF recommended to launch the reform in early 2017, but the central Bank has been vetoed and preferred to procrastinate. “I felt that the economic actors were not yet ready”. Since then, meetings and training with the economic actors, be they private or public, are multiplying to prepare them for this transition.
The governor of the central Bank has also reiterated the arguments which according to him justify the transition of Morocco to a more flexible exchange rate regime. The former regime fixed would be more adequate, since it does not absorb the external shocks that are becoming more frequent and violent. “In the past, the tremors were from the real economy. Today, they come in the financial sphere, are by nature more volatile”, he explains.
Moreover, the fixed exchange rate regime would be incompatible with the moroccan political openness on the global economy (56 free trade agreements, the african policy of Morocco led by King Mohammed VI, the diversification of partners, the positioning of Casablanca Finance City, the Hub of financial, etc).
“The approach of the camel”
Today, according to Jouahri, the prerequisites are there : “We expected that the foreign exchange reserves, macroeconomic balance, and the resilience of banks to improve before we embark on this reform.”
The transition will be gradual and orderly, to be sure that at each step, the prerequisites are still present. “This is the gait of the camel : he raises one foot, and raises the other that once you’ve made sure that the first one is stable”, he explains in graphic terms.
And to prevent : “the transition to a more flexible regime is not an insurance all risk. It is a lever that can support welcomed the reforms, but it will take every step to remain vigilant on the ecological balance, and on the continuation of reforms”.