Exchange Rate Pass-Through Effects on Food and Cereal Inflation in Morocco: An Asymmetric Analysis Under Climate Change Constraints Using an ARDL Model

This study examines the determinants of food price inflation in Morocco using a comprehensive econometric framework based on an Autoregressive Distributed Lag (ARDL) model. Relying on monthly data and controlling for major structural shocks, the analysis captures both the short-run dynamics and long-run equilibrium relationships between food prices and key macroeconomic, external, and climatic variables. The estimation results reveal strong inflation inertia, indicating that past food prices are the most significant driver of current price changes. External cost variables, including the nominal effective exchange rate, world oil prices, and international cereal prices, are mostly insignificant in the short run, suggesting a muted and delayed pass-through. Import volumes exert a marginal but lagged effect, while rainfall emerges as a consistent determinant, highlighting Morocco’s structural vulnerability to climatic variability. The error-correction term is negative and significant, confirming the existence of a stable long-run relationship. Long-run estimates show that oil prices and precipitation remain relevant drivers of food price dynamics, whereas the exchange rate appears largely neutral, reflecting the impact of subsidies, managed exchange rate arrangements, and domestic supply-chain characteristics. Nonlinear NARDL estimations provide no evidence of asymmetric exchange rate pass-through. The findings underscore some policy recommendations to enhance agricultural resilience, strengthen climate adaptation, and improve supply-chain efficiency for food price stability.