Morocco to Move to Flexible Exchange Rate Regime

Central Bank of Morocco. Reuters
Central Bank of Morocco. Reuters
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Morocco to Move to Flexible Exchange Rate Regime

Central Bank of Morocco. Reuters
Central Bank of Morocco. Reuters

The Moroccan government decided on Friday to start the gradual floating of its currency dirham on next Monday, after months of hesitation and urgent requests by the International Monetary Fund (IMF).

The government revealed in a statement that Morocco would adopt a flexible exchange rate regime, in which the dirham exchange rate would range between +2.5 percent and -2.5 percent.

IMF announced in the beginning of last year that conditions have become appropriate for reforming the exchange rate regime in Morocco, but the Central Bank of Morocco postponed the step six months due to forming a new government.

Morocco then revealed the intention to adopt a flexible exchange rate regime end of June, causing a turmoil in the exchange market and pushing the central bank to intervene to protect the currency. This affected the country’s foreign currency reserves negatively.

The Moroccan government said in Saturday’s statement that adopting a flexible exchange rate aims at cementing the national economy immunity towards foreign disruption and supporting the economy's competitiveness.

Currently, the dirham is fixed via a peg that is 60 percent weighted to the euro and 40 percent to the US dollar.

Moroccan Economy and Finance Ministry stressed that the new exchange regime is not an adventure and the step was studied for years.

Unlike Egypt, which floated its pound in 2016, Morocco isn’t facing a currency crisis and wasn’t under pressure to take immediate action. It has an investment-grade credit rating and an expanding private sector, according to Bloomberg.

The country's economy grew by 4.1 percent in 2017, compared with 1.2 percent a year earlier. Inflation rate remained around 0.7 percent in 2017, lower from 1.6 percent in 2016, while the budget deficit rate dipped to 3.5 percent in 2017 from 4.1 percent in 2016.



EU to Keep US Trade Countermeasures on Hold Until August

European Commission President Ursula von der Leyen speaks during a joint press conference with Indonesian President Prabowo Subianto (not pictured) at the European Commission in Brussels, Belgium, 13 July 2025. EPA/OLIVIER MATTHYS
European Commission President Ursula von der Leyen speaks during a joint press conference with Indonesian President Prabowo Subianto (not pictured) at the European Commission in Brussels, Belgium, 13 July 2025. EPA/OLIVIER MATTHYS
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EU to Keep US Trade Countermeasures on Hold Until August

European Commission President Ursula von der Leyen speaks during a joint press conference with Indonesian President Prabowo Subianto (not pictured) at the European Commission in Brussels, Belgium, 13 July 2025. EPA/OLIVIER MATTHYS
European Commission President Ursula von der Leyen speaks during a joint press conference with Indonesian President Prabowo Subianto (not pictured) at the European Commission in Brussels, Belgium, 13 July 2025. EPA/OLIVIER MATTHYS

The EU will extend its suspension of countermeasures to US tariffs until early August as it aims for a negotiated solution on trade with the United States, European Commission President Ursula von der Leyen said on Sunday.

US President Donald Trump escalated his global trade war on Saturday and threatened to impose a 30% tariff on imports from the European Union from Aug. 1, separate from sector-specific duties, despite months of intense talks.

Announcing the extension of the halt on retaliatory measures, von der Leyen told reporters the bloc would "continue to prepare further countermeasures so we are fully prepared."

A first package of countermeasures to US tariffs on steel and aluminium that would hit 21 billion euros ($24.6 billion) in US goods was suspended in April for 90 days to allow time for negotiations.

The suspension had been due to expire on Monday.

A second package has been in the works since May and would target 72 billion euros of US goods, but these measures have not yet been made public and the final list requires approval by member states.

Von der Leyen added that use of the EU's Anti-Coercion Instrument was not yet on the table.

"The (anti-coercion) instrument is created for extraordinary situations, we are not there yet," Reuters quoted her as saying.

The instrument allows the bloc to retaliate against third countries that put economic pressure on EU members to change their policies.

Possible retaliatory steps could include restricting EU market access to goods and services, and other economic measures related to areas including foreign direct investment, financial markets and export controls.