(Ecofin Agency) - The central bank of Morocco announced it has cut its benchmark interest rate by 50 basis points to 1.5%. This measure, which is the second rate reduction since the beginning of the year, is aimed at stimulating the country’s economic growth slowed by the coronavirus pandemic.

The implementation of this strategy will be very beneficial to the tourism sector, at standstill for three months. In recent weeks, Morocco has been gradually reopening its economy after several months of restrictions that have led to the closure of shops and the banning of flights and public transport. This situation, combined with an acute drought affecting the agricultural sector has resulted in one of the weakest economic growth prospects for the country in several years.

“In this regard, it noted that the Bank's macroeconomic projections established in this context remain surrounded by an exceptionally high degree of uncertainty and clearly show a sharp contraction of the national economy this year followed by a rebound in 2021,” said the central bank, which expects GDP to contract by 5.2% in 2020.

Let’s note that the central bank also plans to fully release the reserve account to commercial banks.

Moutiou Adjibi Nourou