Morocco's central bank Bank al Maghrib decided on Tuesday to raise interest rates for the third consecutive time by 0.50 basis points to 3%, in a bid to keep inflation under control.
"Despite a relative easing of externally induced inflationary pressures, recent data show that inflation continues to accelerate under the effect of domestic supply shocks on some food products," reads the bank's note issued today after the quarterly meeting of the bank's board of directors.
The bank notes that the decision to raise interest rates is aimed at preventing the triggering of an "inflation spiral" that feeds back, as well as favouring the return of inflation to levels in line with the price stability objective.
According to the central bank, inflation reached its highest level in over thirty years in Morocco in 2022, averaging 6.6%. In terms of year-on-year increase, it was 8.3% in December 2022, according to the Moroccan statistical body, HCP.
Bank Al-Maghrib forecasts that it will average 5.5% in 2023, considering the rise in food prices.
In 2024, it predicts that external and internal pressures will ease, but predicts that inflation will remain high, at around 3.9% on average, due to the announced start of the removal of subsidies on the country's staples (flour, sugar and butane).