IMF Working Papers

Morocco: A Practical Approach to Monetary Policy Analysis in a Country with Capital Controls

ByMokhtar Benlamine, Meryem Farouki, Ágnes Horváth, Faical Hossaini, Hasnae El Idrissi, Zineb Iraoui, Mihály Kovács, Douglas Laxton, Anass Maaroufi, Katalin Szilágyi, Mohamed Taamouti, David Vávra

February 14, 2018

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Mokhtar Benlamine, Meryem Farouki, Ágnes Horváth, Faical Hossaini, Hasnae El Idrissi, Zineb Iraoui, Mihály Kovács, Douglas Laxton, Anass Maaroufi, Katalin Szilágyi, Mohamed Taamouti, and David Vávra. "Morocco: A Practical Approach to Monetary Policy Analysis in a Country with Capital Controls", IMF Working Papers 2018, 027 (2018), accessed 12/6/2025, https://doi.org/10.5089/9781484341810.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The Central Bank of Morocco has been working on developing a Forecasting and Policy Analysis System (FPAS) to support a gradual move toward a more flexible exchange rate regime and the eventual adoption of a full-fledged inflation-targeting (IT) regime. At the center of the FPAS is a quarterly projection model that was tailored for two different types of exchange rate regimes. Presently, the fixed exchange rate model version is to be used during the pre-IT period, while the flexible exchange rate model version is to be used to prepare alternative scenarios for monetary policy decision makers to discuss the potential policy implications of shocks under an IT regime.

Subject: Conventional peg, Exchange rate arrangements, Exchange rate flexibility, Exchange rates, Foreign exchange, Inflation, Prices

Keywords: BAM policy rate, Conventional peg, Exchange rate arrangements, Exchange rate flexibility, Exchange rates, forecasting and simulation, Global, Inflation, inflation aversion, interest rate, model construction, model economy, monetary policy, money-market interest rate differential, transmission mechanism, version of the MQPM, WP

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