“As long as we have not found other resources to supply ourselves with, we will have problems in terms of prices”. Labrak insists. PH Sradni
To avoid a retroist spiral, the US Federal Reserve raised its main interest rate by half a point on Wednesday, its largest increase in nearly 22 years. For countries like Morocco, the rise of the dollar will inevitably impact the balance of payments, not to mention energy and cereal bills.
It was expected. The American Central Bank (Fed) ended up raising its key rates by 50 basis points. This decision comes naturally to counter inflation and avoid regression in the United States. And even if the markets feared that the Fed would be forced to hit even harder against inflation, this increase still represents the first increase of this magnitude since 2000 and the largest in nearly 22 years.
For countries like Morocco, the impact will obviously be palpable since this decision will make the dollar more expensive, unless the European Central Bank (ECB) does the same with the euro. In any case, the remuneration of the dollar will increase. And this rise in the dollar/MAD parity will induce more expensive imports and more profitable exports.
“This will have a negative impact on our purchases, especially since the essentials are paid for in dollars, especially petroleum products and cereals”, indicates Mohamed Rahj, tax expert and university professor.
What lever should be activated to mitigate the impact? For our interlocutor, “Morocco must sell more abroad to have more dollars to be able to pay for its imports. Otherwise, our trade balance deficit can only worsen, but it is above all the balance of payments that will widen further. Hello damage in terms of deficit!”, Deciphers our economist.
The surge in the dollar, which is approaching ten dirhams (already at 9.97 at the time of going to press) will not be the only determining factor in the rise in the Kingdom’s energy bill. Because its main economic partner the European Union is also preparing for difficult months by refusing to pay for its gas purchases from Russia in rubles and for a break in its supplies. “Europe must get rid of its dependence on Russian fossil fuels,” said Polish Minister Anna Moskwa earlier this week. “Our reserves will be at 100% capacity for this winter,” she assured. “American liquefied natural gas has started to arrive via Lithuania and we are going to supply gas from Norway via Denmark,” she explained.
What impact therefore on prices at the pump in Morocco? Mostafa Labrak, Secretary General of the Federation of Energy and Managing Director of Inergysium Consulting, does not go with the back of the spoon: “the threat of the EU to remove its purchases of oil and gas from the Russia in a maximum of one year means that the quantities that the countries are not going to buy from Russia will be taken elsewhere, and it is precisely this “elsewhere” that poses a problem for us since we are all going to find ourselves on the same market. The quantities placed on the market will be reduced and prices will increase further,” explains the specialist.
It is therefore difficult to predict when this spiral will stop as long as the Russian-Ukrainian war continues. “As long as we have not found other resources to supply ourselves with, we will have problems in terms of prices”, maintains Labrak.
United States: 8.5% inflation in March, the highest level since 1981!
This figure alone justifies the half-point increase in the Fed’s key rates, which now ranges between 0.75 and 1%. “Inflation is far too high and we understand the difficulties it is causing, we are acting quickly to bring it down,” said Jerome Powell, Fed Chairman.
So much for short-term rates. To drive the point home, the Fed will stop buying securities issued by financial institutions. An “unconventional” monetary policy measure that keeps long-term interest rates artificially low in order to support economic growth. The Fed has thus, in recent years, acquired 9,000 billion dollars in assets. The bank’s balance sheet will be gradually reduced by 47.5 billion dollars per month from June, then by 95 billion from next September.