Morocco's Central Bank leaves benchmark interest rate unchanged at 1.5%

The Bank also made a downward revision to Morocco's 2020 economic growth projection

  
Marrakesh city skyline View of Marrakesh cityscape, Morocco. North Africa, Africa

Marrakesh city skyline View of Marrakesh cityscape, Morocco. North Africa, Africa

Getty Images/ Stefan Cristian Cioata

RABAT- Morocco's central bank kept its benchmark interest rate unchanged at 1.5% on Tuesday, saying borrowing costs are consistent with the economic outlook.

In June, the bank cut the rate by 50 basis points and reduced the reserve requirement ratio to 0% to bolster the economy during the coronavirus crisis.

The Central Bank also made a downward revision to Morocco's 2020 economic growth projection. It now expects a contraction of 6.3%, instead of a previous forecast of 5.2%, citing the impact of the pandemic.

It expects the economy to rebound next year with growth of 4.7% in 2021, it said, based on an assumption of improving farm output.

Morocco lifted a strict nationwide lockdown in June but has re-imposed restrictive measures in some big cities with high infection rates. On Tuesday, Morocco had confirmed 103,119 cases and 1,855 deaths.

It sees inflation, driven mainly by food prices, at 0.4% in 2020 and 1% in 2021.

The current account deficit is expected to stand at 6% of gross domestic product as Morocco’s car and textile exports plunge along with travel receipts.

The bank also said the fiscal deficit will expand to 7.9% in 2020 compared with 4.1% last year, due to lower tax revenue.

Government debt is set to surge to 76.1% of GDP in 2020 from 65% in 2019.

(Reporting by Ahmed Eljechtimi, Editing by David Goodman and Ed Osmond) ((ahmed.eljechtimi@thomsonreuters.com;))