Will Morocco’s increased international reserves make the move to a flexible exchange rate more likely?
Rabat – Morocco had 2.5% more in total international reserves as of August 23 than it did at the same time in 2018.
Morocco’s central bank, Bank Al Maghrib, reported that the country has MAD 232 billion in international currencies, according to state-owned media Maghreb Arab Press (MAP).
During the week of August 22-28, over the time of the G7 summit in France, the dirham gained by 0.23% against the euro and by 0.10% against the dollar. The week marked escalations in the trade war between the US and China and concerns about a recession in the German economy.
In the last year, the dirham has gradually been strengthening against the euro. At the same time, the dirham has slightly weakened against the dollar.
Morocco embarked on a plan to float the dirham and gradually move away from set exchange rates in January 2018. However, in January 2019, the government decided to postpone further exchange rate changes because of Morocco’s debt.
One official, speaking to Bloomberg on condition of anonymity, said making the dirham exchange rate flexible might hurt Moroccan international currency reserves due to an “unpredictable global trade environment and no expected pick-up commerce with major partners in Europe.” Two other officials said further changes may wait until 2020.