UAEs investment bank Arqaam Capital said Moroccos GDP growth rate would decline in the coming period, but the financial situation would gradually improve with the implementation of reform programs. Arqaam Capital expects growth rates in 2017 to amount to 4.8 percent, a significant increase from 2016’s 1.2 percent. According to the bank, this growth was driven by improved investment climate and increased agricultural activity, and the latter component has recompensed the countrys economy for the stable growth of non-agricultural sectors. Monetary policies boost growth rates with the interest rate cut in March to 2.25 percent and inflation rates remained at low levels. Despite the expectations of the growth of non-agricultural sector in 2018, Arqaam Capital believes that overall growth will fall to three percent in that year due to the agricultural sector growth rate returning to normal. In its vision of Moroccos future economic growth, the year 2018 will be an exception to low growth, with rates rising again in the following year and continuing above four percent until 2022, supported by structural reforms currently being implemented by the country. In July 2017, the International Monetary Fund (IMF) granted Morocco a $3.5 billion credit line for two years to implement structural reforms to support systems, pensions and taxes. A report by Arqaam Capital shed light on one of the Funds most recommended actions, which are to make exchange rate policies more flexible. The bank believes that leaving the local currency to supply and demand will not create strong fluctuations in the economys performance. Morocco decided to implement the shift to a more flexible exchange rate system in July. These expectations created pressure on the currency, prompting the central bank to intervene to protect it in May and June, contributing to the drop in foreign exchange reserves. Arqaam Capital says the reserve was reduced to $20.6 billion in mid-2017, compared with $25.4 billion at the end of 2016, not only due to currency protection but also to float expectations meeting with the rise of energy import costs and repayment of sovereign loans.