Morocco’s Central Bank announced that measures will be gradually taken to ensure a more flexible exchange rate of the Dirham amid promising macro-economic conditions marked by low oil prices and increasing demand on phosphates. The floating of the pegged dirham was encouraged by the IMF which sees in a more flexible exchange regime a move to strengthen the competitiveness of the Moroccan economy and its resilience against external shocks. The increasing demand on Morocco’s phosphates with the recent sealing of a Q2 contract with India bodes well for Morocco’s foreign currency reserves as it braces for the dirham float. This cautious and gradually approach will enable the Moroccan economy to wither the risks of a hastened dirham float and the potential devaluation that may ensue. A stable tourism market, a promising agricultural output following abundant rainfall and a subsidy reform helped boost Morocco’s foreign exchange reserves which now cover 7.6 months of imports.

Source: The North Africa Journal March 11, 2017 17:52 UTC