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Morocco, World Bank Sign Agreement to Strengthen Human Capital

A woman walks past shops in the ancient Moroccan city of Fez on June 8, 2022. (AFP)
A woman walks past shops in the ancient Moroccan city of Fez on June 8, 2022. (AFP)
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Morocco, World Bank Sign Agreement to Strengthen Human Capital

A woman walks past shops in the ancient Moroccan city of Fez on June 8, 2022. (AFP)
A woman walks past shops in the ancient Moroccan city of Fez on June 8, 2022. (AFP)

The World Bank approved last week $500 million to help strengthen human capital and resilience in Morocco.

Minister Delegate in charge of the Budget Fouzi Lekjaa and World Bank Director of Operations for the Maghreb and Malta Jesko Hentschel signed the agreement on Monday, which represents the first tranche of the approved loan.

This budget support program seeks improvements in the protection against health risks, human capital losses during childhood, poverty in old age, and climate change risks, the bank stated.

Lekjaa said in press statements on this occasion that the agreement will enable the kingdom to undertake reforms launched by King Mohammed VI.

He said that the bank’s support indicates that this large and credible reform gives legitimacy to government action to make this challenge a success by 2025 and ensure providing the conditions of a dignified life for all Moroccans.

Hentschel, for his part, stressed that the bank considers the reform of social protection in the Kingdom “very innovative, ambitious and integrated.”

The proposed financing is based on three pillars, the first of which includes measures to bolster physical and human resources to improve health services for all beneficiaries, enroll up to 11 million self-employed workers and their dependents and integrate up to 11 million people currently enrolled in Medical Assistance Scheme into the compulsory health insurance.

The second pillar includes measures to implement the family allowance program and expand coverage of pension plans.

It provides for adopting decrees and other legislation to ensure proper governance, identification and targeting of health and social protection reforms.

The third pillar focuses on improving resilience to natural disasters and climate risks, including strengthening institutional and coordination framework for disaster and climate risk management, establishing coordination committees of key stakeholders, and improving risk transfer mechanisms such as agricultural insurance.

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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.