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Join on Telegram Rabat – Morocco’s central bank, Bank Al-Maghrib (BAM), reassured Moroccans on Wednesday that the Moroccan dirham currently trades at around MAD 11 per €1, denying speculation suggesting that the Moroccan currency had lost around 70% of its value.
Google’s currency converter experienced a technical glitch on Wednesday night, as it showed the incorrect value of the Moroccan dirham against the US dollar. Google search results showed that the dirham dropped to MAD 17 per $1, while it actually trades at around MAD 10 per $1.
The incident triggered a nationwide panic among Moroccan netizens, who believed that the country’s currency had indeed massively dropped in value. However, Moroccans were relieved to learn that it was a Google error.
In its statement, BAM stressed that it is the “only reliable source” Moroccans should turn to when inquiring about the exchange rates of the Moroccan dirham, in addition to Bloomberg and Refinitiv.
The statement also provided a link that people can use to know the Moroccan dirham’s exchange rate against the euro.
Meanwhile, the Moroccan Observatory for Digital Sovereignty (OMSN) expressed its “concerns around Google’s position towards this matter,” calling on the world’s largest search engine to address the situation in an official statement.
The OMSN warned that the incident “affects the digital sovereignty of Morocco … especially that the Kingdom is considered to be one of the most attractive destinations for investments.”
Morocco World News reached out to Google for a statement regarding the incident but did not receive an answer at the time of writing this article.
Is it Morocco’s turn?
The Google glitch incident came amid an uneasy global context that saw successive economic crises and plunging inflation hitting a number of countries. This has raised fears among Moroccans, with many concerned that the North African country’s turn may have come.
Speaking to Morocco World News, Economist and Director of the Government Work Observatory Mohammed Jadri emphasized that the speculations suggesting that the value of the Moroccan dirham has dropped or may soon drop are nothing but “malicious rumors” seeking to “harm the national economy.”
Jadri reassured that Morocco adopts a partial floating exchange policy for the Moroccan dirham, explaining that the country’s currency can only drop or rise by no more than 5%.
“Under the current monetary policy, the price of the dollar [against the Moroccan dirham] cannot exceed 5% upwards or 5% downward,” he emphasized.
Meanwhile, Moroccan financial analyst Zakaria Garti ruled out the possibility of a “big change” in the Moroccan dirhams’ exchange rates occurring in the near future, citing many factors.
In an interview with Morocco World News, Garti explained that Morocco currently possesses high foreign exchange reserves, which average at around MAD 330 billion, “one of the highest levels Morocco has reached in its history.”
He also highlighted Morocco’s post-COVID economic recovery, particularly the increase in exports in the automotive industry, which are expected to reach MAD 80 billion this year.
The Moroccan banker also expects the Moroccan company OCP Group to reach the “best figures in its history,” which would in turn speed up the country’s economic recovery. Remittances from the Moroccan diaspora are also expected to reach MAD 100 billion in 2023, he added.
Thanks to Morocco’s foreign exchange reserves and “stable” economy, there is “no risk” of the Moroccan dirham recording any “rapid or sharp decline” similar to that of the Egyptian currency, Garti concluded.
Global economic crisis
Several economies, including those in the Middle East and North Africa region (MENA), were hit hard by the COVID-19 repercussions, the war in Ukraine, and rising inflation and commodity prices.
For instance, Lebanon is currently facing a dire economic crisis, which has led to alarming levels of poverty and food insecurity in the country.
In addition, Lebanon’s economic shock and shortage in foreign currency led the country’s banks to put limits on how much money citizens can withdraw from their own bank accounts.
Lebanese banks’ policy took a huge toll on low-income households in the country, and there have been reports of several people breaking into the country’s banks in an attempt to access their own savings.
Read also: 42% of Moroccans Believe the Country’s Economic Situation ‘Will Improve’ Soon
Meanwhile, the Egyptian pound has hit a new low, losing around 50% of its value since March 2022. The economic slump occurred after the country agreed to float its currency and opt for a flexible exchange rate regime in which supply and demand determine the value of the Egyptian pound.
The latter was one of the conditions of the International Monetary Fund (IMF), which approved a $3 billion fund for Egypt in December 2022.
According to the Financial Times, Egypt’s economic instability and rising inflation, which soared to above 20%, led foreign investors to pull billions out of the country. This has only added fuel to fire and caused a massive foreign currency shortage.
Similar trends were evident in the Maghreb region, as inflation in Tunisia reached 9.8% in November 2022, the highest level in more than three decades. The unprecedented economic crisis sparked protests across the country, with Tunisians demanding that President Kais Saied step down.
On the global stage, the US dollar’s value has been dropping against major currencies over the past months, amid looming economic recession concerns, business outlet CNBC reported.
