Morocco's forex reserves shrink by 7.9 pct in Oct.

Source: Xinhua| 2017-11-12 01:48:25|Editor: yan
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RABAT, Nov. 11 (Xinhua) -- Morocco's foreign exchange reserves stood at 24 billion U.S. dollars by the end of October, shrinking by 7.9 percent compared to the same period last year, Morocco's Central Bank said on Saturday.

The drop comes as the country plans to move to gradually float dirham.

The central bank had announced that the first step to float the currency would start in July.

However, the Moroccan government decided to delay the move, saying studies are being carried out to ensure enough time for the decision to take effect and to better understand "its impact on the economy and, in particular, on the purchasing power of citizens."

International Monetary Fund (IMF) has vowed its backing to Morocco's move.

Earlier this week, IMF head of mission in Morocco, Nicolas Blancher, said IMF "supports the authorities' intention to gradually transition to a more flexible exchange rate regime, which should support the economy's ability to absorb external shocks, and raise competitiveness."

"With current conditions that continue to offer a window of opportunity to implement the transition in a gradual and orderly manner, starting the process as soon as possible would be appropriate," he underlined.

Currently, the dirham is fixed via a peg that is 60 percent weighted to euro and 40 percent to U.S. dollar.

The first stage will ease that peg to allow the currency to trade in a narrow range, which will expand gradually over a few years.