door businessam.be
published on Sunday, October 27, 2024 at 7:01 PM •
2 min read
Key takeaways
- The Moroccan central bank will gradually adjust the exchange rate regime from 2026. This will cause the dirham to start to deviate from the current peg, which is currently a mix of euros and US dollars.
- A comprehensive plan is being developed to ensure a smooth transition for regulators and market participants.
- The ultimate goal is a market-driven currency, but the process will be gradual to allow smaller companies to adapt.
The governor of Morocco’s central bank revealed that the country plans to gradually adjust its exchange rate regime from 2026. This will gradually move the dirham away from its current peg, which is currently a mix of euros and US dollars. The governor stated that both the central bank and financial institutions are prepared for this transition and regulators are actively working on a comprehensive plan.
The transition to a more flexible currency was initially initiated in 2018, but was paused due to factors such as the economic slowdown, decline in tourism due to pandemic, recurring drought, declining support from Gulf Arab states and rising energy costs. While the ultimate goal is a market-driven currency, the governor stressed the need for a gradual approach to allow market participants, especially smaller businesses crucial to the Moroccan economy, to adapt.
Financial reforms
In addition to the exchange rate reform, authorities are considering issuing at least $1 billion in Eurobonds by early 2025. The governor sets Bloomberg However, we propose to postpone this issuance until early next year due to the global uncertainty surrounding the US presidential elections and their possible impact on policy in the Middle East.
Furthermore, Morocco plans to set up a currency swap market and introduce derivatives trading in 2024 as part of its broader financial market development strategy.
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Ah, the Moroccan central bank and its plans to tango with currency! What a relationship drama we have on our hands! They’re set to adjust their exchange rate regime from 2026! Yes, that’s right! The dirham is going to start misbehaving and veering away from its comfortable little mix of euros and US dollars. I mean, it’s like deciding to go vegan after being a loyal meat-lover for years—everyone’s a bit nervous, aren’t they?
Now, if you’re a fan of gradual change, then you must be thrilled because this central bank isn’t about to rush into anything. Apparently, there’s a “comprehensive plan” being developed—because what’s the point of big moves without a PowerPoint presentation, am I right? They’re rolling out the red carpet for regulators and market participants, ensuring everyone has their cue cards ready for this exciting transition. I can see them now, in a boardroom, laying out a plan like it’s some sort of Olympic event: “Okay, folks, let’s synchronize our watches and make this change happen smoothly!”
The goal? A market-driven currency. Sounds fancy! But don’t worry; it won’t be a “go big or go home” moment. No, they’re opting for baby steps. Because, let’s face it, nobody wants to traumatize the smaller businesses that really make the Moroccan economy tick—like an over-caffeinated espresso machine that’s only half-used to the voltage.
This isn’t the first time Morocco’s played around with its dirham’s freedom. Back in 2018, they flirted with the idea of a flexible exchange rate, but the romance was cut short—why, you ask? Well, it’s a soap opera of economic slowdowns, pandemic-induced travel bans, and rising costs. Drought and dwindling support from those generous Gulf states only added to the thrill. It’s enough to make you want to binge-watch the entire season in one go!
Now, paired with this exchange rate reform is the tantalizing tease of at least $1 billion in Eurobonds. But wait, hold your horses! The governor wants to postpone that juicy issuance until early next year—thanks to the uncertainties of US presidential elections! Talk about playing it cool! I mean, who wants to dive into the deep end when you don’t even know if the pool is open?
And as if that weren’t enough, Morocco is also planning to introduce a currency swap market and derivatives trading next year. It’s a financial revolution unfolding faster than you can say “global economic strategy.” I mean, who knows? Maybe they’ll throw a currency swap party where everyone brings their exchange rate and dances the night away!
So, here we are, folks. Morocco is setting the stage for a daring currency adventure, gradually moving its dirham from its cozy peg—all with a carefully curated approach. It’s like watching a well-rehearsed play: full of anticipation, slight hesitation, and possibly… a great deal of popcorn-worthy drama. Let’s raise a glass (of dirham, preferably) and watch how this unfolds! Cheers!
door businessam.be
published on Sunday, October 27, 2024 at 7:01 PM •
2 min read
Key takeaways
- The Moroccan central bank will gradually adjust the exchange rate regime from 2026. This will cause the dirham to start to deviate from the current peg, which is currently a mix of euros and US dollars.
- A comprehensive plan is being developed to ensure a smooth transition for regulators and market participants.
- The ultimate goal is a market-driven currency, but the process will be gradual to allow smaller companies to adapt.
The governor of Morocco’s central bank disclosed that beginning in 2026, Morocco will embark on a phased adjustment of its exchange rate regime. This significant shift is expected to gradually loosen the dirham’s current peg to a mix of euros and US dollars. Both the central bank and financial institutions are ready for this transition, emphasizing that regulators are diligently crafting a comprehensive strategy.
The initiative for a more flexible currency was first introduced in 2018 but was subsequently halted due to various challenges, including an economic slowdown, a drop in tourism exacerbated by the pandemic, persistent drought conditions, diminishing support from Gulf Arab nations, and escalating energy costs. While targeting a transition to a market-driven currency, the governor underlined the importance of a cautious strategy, allowing vital market participants, particularly smaller businesses critical to the Moroccan economy, adequate time to adjust.
Financial reforms
In addition to the exchange rate reform, authorities are projecting to issue at least $1 billion in Eurobonds by early 2025. However, the governor proposed to defer this issuance until next year, citing global uncertainty linked to the upcoming US presidential elections and their potential implications for policies in the Middle East.
Furthermore, Morocco plans to establish a currency swap market and introduce derivatives trading in 2024 as part of its broader financial market development strategy.
If you want access to all articles, temporarily enjoy our promo and subscribe here!
