Morocco Expands Dirham’s Trading Range to Boost Economic Resilience

"After the first phase of reforms last year, the central bank will continue to keep the dirham in an euro-dollar basket with a ratio of 60% to 40% respectively," said Abdellatif Jouahri, the Governor of Bank Al-Maghrib, in an interview on the sidelines of the International Monetary Fund (IMF) meetings.

According to him, the next step is to further widen the fluctuation range, at the first sign of external shocks on the Moroccan economy.

It is in this way that the IMF has, according to his words, estimated that it was time to advance the reforms. The ambition, Abdellatif Jouahri will say, is to move from the management of the Moroccan currency to a monetary policy targeting inflation, in which interest rates will be adjusted more frequently.

The second stage of the reform will consist in "distancing" the currency from the negotiation basket and giving the market the necessary leeway to set the dirham rates. "Supply and demand will determine the value of the dirham," assured the Governor of Bank Al-Maghrib.

To succeed in this stage, the central bank intends to ensure beforehand that companies, in particular small and medium-sized enterprises, adapt to the reforms introduced in 2018.

For Abdellatif Jouahri, the purpose of these reforms is to catch up on the delay that Morocco has experienced in terms of global competitiveness.