To avoid a recessionary spiral, the U.S. Federal Reserve raised its main interest rate on Wednesday by half a point, its biggest increase in nearly 22 years. For countries like Morocco, the rising dollar will inevitably impact the balance of payments, not to mention energy and grain bills.
It was expected. The U.S. central bank (Fed) finally raised its key interest rates by 50 basis points. This decision comes naturally to counter inflation and avoid recession in the United States. And even though the markets feared that the Fed would be forced to hit inflation even harder, this increase still represents the first hike of this magnitude since 2000 and the largest in nearly 22 years.
For countries like Morocco, the impact will obviously be palpable as this decision will increase the dollar’s value, unless the European Central Bank (ECB) does the same with the euro. In any case, the dollar’s value will increase. And this increase in the dollar/MAD parity will lead to more expensive imports and more profitable exports.
It is therefore difficult to predict when this spiral will end as long as the Russian-Ukrainian war continues.
Be the first to comment