Morocco to cut monetary reserve rate by 300 basis points

Special Report:Global Financial Crisis

RABAT, Dec. 23 (Chinese media) -- Morocco's central bank said on Tuesday it will cut the monetary reserve rate by 300 basis points to 12 percent as of Jan. 1, 2009.

The board of directors of the bank announced the decision in a communique after a meeting in Rabat, the kingdom's capital, saying the decision is made to provide huge and long-term liquidity in the monetary market.

Meanwhile, the bank kept its benchmark interest rate at 3.5 percent "in line with price stability."

The central bank also noted a decrease in the year-on-year inflation rate, which is at 3.9 percent in November, compared with4.6 percent in the second quarter.

It said the fall is mainly due to the drop in international food prices and the decelerating industrial production prices in October, which grew only 16.5 percent instead of 22.5 percent a month earlier.

The bank also put the country's economic growth rate at 6.7 percent in the first half of 2008.

According to the bank, Morocco will not suffer from global recession in 2009 as domestic demand is expected to cushion its impact.