Bloomberg Middle East
By Souhail Karam
Morocco’s central bank said it may revise its currency peg regime to reflect the weakening of the euro against the U.S. dollar.
The central bank is working with the finance ministry on the issue, Governor Abdellatif Jouahri told a news conference in Rabat after cutting the benchmark interest rate by a quarter of a percentage point to 2.5 percent. Morocco has a managed float exchange-rate regime against a euro-dominated basket of currencies, according to the Economist Intelligence Unit.
“It may be time to revise our weighting,” Jouahri said. He said Morocco’s international trade is equally divided between dollars and euros. The euro has weakened 9 percent versus the dollar in 2014, reaching a more-than two-year low of $1.2247 on Dec. 8.
Jouahri said Morocco’s economy is poised to recover next year, expanding 4.4 percent compared with an estimated level of 2.5 percent in 2014. The government will cut spending on subsidies to 33 billion dirhams ($3.7 billion) this year, below its 35 billion-dirham target set in the budget, he said.
To contact the reporter on this story: Souhail Karam in Rabat at skaram5@bloomberg.net
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net Mark Williams
