Morocco holds rate, inflation subdued but forecast raised

    Morocco's central bank held its key rate steady at 3.0 percent, saying inflation remains subdued -despite a raised forecast - and in line with its target.
    The board of Bank Al-Maghrib said inflation is forecast to remain around 2.2 percent in 2013 and 1.6 percent in the second quarter of 2014, averaging 2.0 percent over the forecast horizon, "broadly in line with the objective of price stability in the medium term."
     Morocco's inflation rate eased to 2.2 percent in February from 2.6 percent in January and December while core inflation, which reflects the fundamental trend of price, remained below 1 percent, the Central Bank of Morocco said.
    In December the central bank estimated 2013 inflation of 1.7 percent and 1.5 percent in Q1 2014.
    Morocco's central bank has held rates steady since March 2012 when it cut rates by 25 basis points.

    While international economic activity weak and uncertain, external inflationary pressures should largely remain absent, the bank said.
    Morocco's Gross Domestic Product growth is estimated at 2.6 percent in the fourth quarter, and below 3.0 percent for the full 2012 year. Despite uncertainty surrounding growth in Morocco's major trading partners, the central bank estimates GDP growth of 4-5 percent this year, mainly due to higher agricultural activity.
    This forecast is unchanged from December.

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