Morocco Advances Dirham Liberalization to Boost Economic Flexibility

Led by Bank Al-Maghrib, this reform has favored the widening of the dirham’s fluctuation bands, allowing for better knowledge of market dynamics and reducing the central bank’s interventions, analyzes Finances News Hebdo, specifying that the introduction of an interbank foreign exchange market has helped strengthen currency exchanges and market liquidity. Companies now have more flexibility to adjust their foreign exchange positions, while Bank Al-Maghrib only intervenes in case of excessive imbalances, writes the magazine.

The creation last February of a foreign exchange futures market is a strategic lever for importers and exporters, in the sense that this innovation allows them to set an exchange rate in advance in order to avoid the effects of dirham fluctuations. In short, it allows them to secure their margins and anticipate their costs more precisely. In the first quarter of 2025, the average monthly amount of foreign exchange transactions against dirhams on the interbank market fell by 37.7% year-on-year, reaching 42.3 billion dirhams. Meanwhile, the dirham appreciated by 1.39% against the euro and depreciated by 1.49% against the US dollar, illustrating the natural adjustment of the market, we read.

Despite these major advances which testify to the desire to strengthen the flexibility of the dirham, Bank Al-Maghrib notes that rapid liberalization could lead to excessive volatility and promote imported inflation or massive capital outflows. The central bank prefers a gradual transition, which allows companies and financial institutions to imbibe the functioning of the mechanisms in place before taking new steps. If these conditions are met, Morocco will be able to consider a move towards a fully flexible exchange rate regime. The goal is to strengthen the Moroccan economy and attract international investors.