Morocco's Plan to Evolve Dirham Exchange Rate by 2026
Morocco's Central Bank, led by Governor Abdellatif Jouahri, has announced plans to ease the dirham's peg to the euro and dollar by 2026. This initiative, aimed at reforming the currency exchange regime, was discussed during the International Monetary Fund and World Bank annual meetings in Washington. Jouahri emphasized that the Central Bank is 'technically ready' for this transition, which involves linking the dirham to a basket of currencies rather than just the euro and dollar.
The gradual liberalization of the dirham began in 2018 but faced delays due to the economic downturn and reduced tourism revenues during the COVID-19 pandemic. The Central Bank is now working on a comprehensive plan to ensure all market participants, especially small businesses that significantly contribute to Morocco's GDP, are prepared for this change.
Future Financial Strategies and Challenges
In addition to the currency reform, Morocco is considering issuing Eurobonds valued at at least $1 billion by early 2025. However, the government may postpone this decision due to global uncertainties, particularly regarding the upcoming U.S. presidential election and its potential impact on Middle Eastern policies. Furthermore, the Moroccan government plans to establish a currency exchange market next year, aimed at enhancing financial derivatives trading within the Kingdom. Despite these ambitious plans, Morocco faces challenges such as recurring droughts, high energy prices, and reduced international financial support.
