The Governor of the Moroccan Central Bank, Abdellatif Jouahri, announced that Morocco plans to ease the dirham exchange rate system by 2026, in an interview with Bloomberg. This step comes as part of a gradual reform process that was halted during the Corona pandemic.
Al-Jawahiri indicated – in a Bloomberg interview in Washington, where he is attending the annual meetings of the International Monetary Fund and the World Bank – that the Moroccan Central Bank is “technically ready” to move to this new system, as work is underway on a gradual plan to replace the dirham’s peg to the euro and the dollar only. By linking it to a basket of currencies that includes the euro and the dollar.
He explained that banks in Morocco are ready for this step as well, but the process will require more time and supervision to ensure the readiness of market participants, especially small companies that represent the largest portion of the gross domestic product.
Morocco began to shift towards a gradual liberalization of the dirham exchange rate in 2018, but this shift was delayed as a result of the economic slowdown and the decline in tourism revenues due to the pandemic, according to Bloomberg.
Morocco also faces other challenges, such as recurring drought and high energy prices, in addition to reducing financial support from abroad.
One of the future steps that Morocco is considering is issuing Eurobonds worth at least one billion dollars by early 2025, but Al-Jawahiri indicated that the government may wait until early next year given the global uncertainty related to the US presidential elections and the impact of the next administration’s policies in the Middle East.
As part of its plans to develop financial markets, the Moroccan government also plans to launch the currency exchange market next year, as part of the Kingdom’s plans to activate the trading of financial derivatives, as Al-Jawahiri explained.
