Abdellatif Jouahri, the governor of Bank Al-Maghrib, defended the independence of the institution he heads, saying that the Basic Law prohibits seeking or accepting instructions from the government or third parties.
Jouahri’s speech came within the press conference that followed the Bank Al-Maghrib board meeting, which ended with a decision to temporarily stop the monetary tightening cycle of the main interest rate by keeping 3 percent.
Jouahri clarified, in response to questions from journalists, that “the interference in the functions of Bank Al-Maghrib has been settled in the basic law of the bank, and it is a law that applies to everyone, and it is my responsibility to ensure that these requirements are respected.”
Al-Jawahiry added, “If it had been a matter of government intervention, we would not have raised the interest rate three times since September, by a total of 150 basis points.”
The Wali of Bank Al-Maghrib referred in this regard to Article 13 of Law No. 40-17 relating to the organic law of Bank Al-Maghrib, which states that “the bank, while exercising its functions in the person of the Wali of Bank Al-Maghrib, the general manager and members of its board, cannot seek or accept instructions from the government or from third parties.” .
Jouahri considered that the difference in analysis regarding Bank Al-Maghrib’s decisions is normal and exists in the entire world, and added: “Our assessment is that in view of the bank’s basic mission and the mechanisms, human resources, qualifications and relations we have with central banks, we have the possibility to go into the details regarding the rises and falls regarding inflation, this This does not mean that the decision is easy, we are in an inaccurate science, and this requires humility to perform a deep analysis in order to reach a good or less bad decision in our current circumstances.
Jouahri stressed that Bank Al-Maghrib’s decisions regarding raising the main interest rate do not overlook growth and employment, stating that it was keen to provide liquidity to the banking sector at the level of the money market, as all funding requests have been met by the banking sector since the Corona crisis until now, considering that they are institutional requests and their goal. Finance the economy.
important indicators
Jouahri revealed that Bank Al-Maghrib holds monthly meetings with the Ministry of Economy and Finance, and also collects expectations from experts from various disciplines before each quarterly meeting that ends with the decision on the main interest rate. .
The speaker pointed out that knowing the effect of raising the main interest rate on the real economic level requires evoking two indicators, the first is related to the evolution of the borrowing rate, and the second is related to the analysis of supply and demand for loans in each quarter.
He stated that the government took measures on its part to confront inflation, including adding 10 billion dirhams within the Finance Law to support some economic sectors and purchasing power, not to mention the new program of 10 billion dirhams to support the agricultural sector, noting that what currently affects inflation is soft foodstuffs.
The Governor of the Central Bank emphasized that “every party works in the interest of the country, and each carries out a mission for a purpose.” And he added: “In the entire world, politicians think in the short term, but we think for at least two years, and the quarterly meetings of the Bank Al-Maghrib Council are important; Because it allows us to update and analyze the data to be sure to make the most appropriate decision.”
interest rate and investment
Al-Jawahiri acknowledged that the mechanism of the main interest rate is not sufficient on its own to confront the rise in inflation, stressing that “fiscal policy and structural reforms must accompany monetary policy and vice versa, and there must be integration between fiscal and monetary policies to achieve financial stability for the country; Because macroeconomic balances are an essential part of the national sovereignty of any country.
Regarding the impact of raising the interest rate on investment, the governor of Bank Al-Maghrib underestimated that, and said that “whoever invokes this carries a not good investment project,” considering that good investment can bear the increase taken, and “the economic actor needs confidence and vision, and the World Bank revealed in a report Regarding investment obstacles, he said that financing conditions come in eighth place, while we find bribery, real estate and administrative procedures at the top.
Cash and digital currency
In his talk about the phenomenon of the increase in cash in circulation, Al-Jawahiry said that this matter is one of the payment traditions in Morocco as in other countries, and it is mainly related to the size of the informal sector, which represents 30 percent of the GDP, according to a previous study.
The data provided by the governor of Bank Al-Maghrib reveal that the “cash” phenomenon increased significantly during the Corona pandemic, as its volume increased by 20 percent in 2020, and the pace returned to its normal level in 2021, then it rose by two digits again last year and continued during the current year. This phenomenon is due to the increase in tourism revenues and the remittances of the Moroccan community abroad.
Al-Jawahiry warned that launching the digital currency of the Central Bank in the future may be difficult with the continued increase in the volume of “cash.” He said, “Efforts must focus on changing the mentality and culture,” recognizing in this regard that “there is nothing more difficult than this task.”
However, he considered that if the government takes the decision to distribute the expected direct support to poor families through the payment system over the phone, this may prompt people to think about the matter, and thus reduce the percentage of “cash.” He asked in this regard: “How can a country like India, which includes 1.5 A billion people to succeed in this matter, and we, with a population of 35 million, will not succeed?