Morocco

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); experiment with monetary targets 1998-2002 but targets often missed and not dominant element of policy; direct credit controls replaced in move to indirect monetary instruments, notably regular 7-day repo auctions, interest rates now liberalised; central bank autonomy strengthened 2006

loose exchange rate targeting LERT

2007-17

exchange rate pegged to basket whose weights were finally disclosed (80% euro, 20% USD); improved monetary arrangements including publication of inflation forecasts; from 2008 IMF repeatedly raises issue of shift to inflation targeting; medium term plan 2013 to move to greater exchange rate flexibility and then inflation targeting, former to be implemented 2016-17 (but not)

full exchange rate targeting FERT

2018-23

exchange rate margins widened 2018 from ± 0.3% to ± 2.5% relative to basket of euro (60%) and USD (40%); heavy impact of Covid-19 (plus drought) but strong policy response; 2020 margins widened to ± 5%; 2022-23 global commodity price shock;

loose exchange rate targeting LERT