Morocco's central bank raised its benchmark interest rate by quarter of a point today as a response to continuing high inflation. The overnight rate was raised to 3.5 percent from 3.25 percent, the highest level since at least 2003. Moroccan inflation hit a 12-year high of 5.4 percent in May on the high prices of cereal and energy products, almost all of which come from abroad. It fell to 4.8 percent in August from 5.1 percent a month earlier.
The Moroccan government expects the economy to expand 6.8 percent this year, rebounding from last year's 2.7 percent when drought cut crop yields to a seven-year low. Agriculture accounts for as much as 14 percent of the Moroccan economy. Growth accelerated to an annual 7 percent in the first quarter this year after agricultural production picked up.
