The president of the Moroccan Center for Governance and Management (CMGM), Youssef Guerraoui Filali, said that the decision to raise the key rate to 2% by Bank Al-Maghrib (BAM) should have a significant impact on the evolution of inflation in 2023.
In a statement to MAP, Mr. Guerraoui said that the central bank’s decision to increase the key rate was expected by investors, particularly in a context where inflationary tensions persist and continue to impact the national economy. overall, noting that it also aims to curb the progression of inflation and guarantee the conditions for a rapid return to levels in line with the objective of price stability.
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In this regard, he explains that the increase in the key rate would thus mean a slowdown in demand for loans, which will become more expensive for citizens and businesses, thus limiting the volume of the money supply in circulation, and as a result the decrease of inflation.
This decision would force bank customers to borrow in view of this increase in the policy rate, which will impact consumption and the flow of money in circulation, since the absorption of liquidity from the market is an important tool to reduce the rate of interest. inflation, he said. Furthermore, he noted that the national economy continues to suffer from an unfavorable external environment and the repercussions of the drought, with an acceleration of inflation, which continues to be fueled by pressures of external origin, knowing that the latest available data show a large diffusion towards the prices of non-tradables.
He also recalled that the prices of food and energy raw materials still remain high, according to data relating to the first eight months of the year, noting that inflation increased to 8% in August following 7.7% in July, and 6.3% on average in the second quarter and 4% in the first, mainly driven by higher prices for food products and fuels and lubricants.
With MAP
