Morocco

Morocco has had some sort of focus on the exchange rate throughout, and some gradual financial liberalisation, with exchange rate targeting formalised in 1991 and hardened in 2007; plans for inflation targeting so far unrealised.

Years Targets and attainment Classification
1974-80 exchange rate set daily by central bank, stabilised versus undisclosed basket (revised 1980); elements of fiscal dominance; monetary policy based on direct instruments including direct credit controls (encadrement du crédit) from 1976 augmented exchange rate fix AERF
1981-90 late 1980 currency basket revised, more flexibility (depreciation) allowed, and interest rates reformed (set more actively by authorities); direct credit controls continue but central bank also intervening regularly in growing money market; some money and credit targets set 1987-90 but rarely attained loosely structured discretion LSD
1991-2006 exchange rate pegged to undisclosed basket; after April 2001 devaluation exchange rate pegged to revised basket ‘dominated by euro’, but weights not disclosed; interbank forex market from 1996 (tightly managed); direct credit controls replaced in move to indirect monetary instruments, interest rates now liberalised; central bank autonomy strengthened 2006; experiment with monetary targets 1998-2002 but targets often missed and not dominant element of policy loose exchange rate targeting LERT
2007-14 exchange rate pegged to basket whose weights were finally disclosed (80% euro, 20% USD); improved monetary arrangements including publication of inflation forecasts; so far unfulfilled medium term plan to move to greater exchange rate flexibility and inflation targeting full exchange rate targeting

Selected IMF references: RED 1977 pp30, 33, 49; RED 1981 pp30, 33-4, 44; RED 1982 pp43-4, 47; RED 1991 chIV; SI 1996 sections I.5, I.7; RED 2000 chV; SR 2006 p3; SR 2009 p5.

Additional source: Achy and Boughrara (2011).

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