Bad news for the dirham

The dollar and the euro reached parity, which had not happened for 20 years. This new deal, which should take hold over the next few years, will have direct consequences for Morocco.

Since the creation of the euro in 2022, it has always been above the dollar, but since Tuesday, a new configuration of the world economy has just opened up.

The euro is in trouble against the dollar, but also against the Swiss franc considered a safe haven like the dollar, where it fell to 0.9836 Swiss francs, its lowest since 2015.

The dollar also appreciated against the pound sterling which plunged to 1.1807 dollars, a level not reached since March 2020.

Several analysts believe that the euro, which has currently reached parity with the dollar, will become weaker against the dollar.

This situation has a direct consequence for Morocco given that the course of the dirham which is calculated on the basis of a basket of currencies composed of 60% in euros and 40% in dollars. The dirham therefore depreciates against the dollar and appreciates against the euro.

In these times of economic uncertainty, the liberalization of the dirham desired by several international monetary institutions would have had catastrophic consequences.

The Wali of Bank Al Maghrib, Abdellatif Jouahri was therefore right to reject the idea of ​​widening the fluctuation band of the dirham which would have completely delivered the national currency to the market and would have been strongly depreciated against the dollar.

Because according to economic analysts, the dollar, which has just reached parity with the euro, will enter a new configuration where it will be increasingly strong in the coming years.

This rise in the dollar can be explained by several elements, the first of which is the rise in the price of products derived from hydrocarbons (gas and oil). If Europe is heading towards a halt in Russian gas deliveries, this would lead to a recession throughout the euro zone.

Faced with the uncertainty of the war in Ukraine, the oil-exporting countries have kept a large part of their revenues in the United States, which increases the monetary reserves of the first world power.

In addition, the FED has increased its rates, unlike the European Central Bank (ECB), which has been slow to react and will find it difficult to tighten its monetary policy to fight against inflation.

The situation in Ukraine, where Europeans are suffering the consequences of Russia’s decisions to distance itself, worries investors, which has resulted in a flight of capital to the United States.

Faced with the prospects of recession in Europe, investors are naturally turning to markets where the situation is more advantageous, in particular by betting on safe havens such as the dollar.

Consequences for Morocco, the Kingdom which buys its imports in dollars, will have to pay more for its imports.

This concerns oil, metals, certain raw materials, and these increases will impact prices on several levels for consumers whose purchasing power is in crisis because of soaring inflation.

For Moroccans, this will firstly affect energy prices but also consumer products such as food and equipment.

The government, for its part, will find it difficult to keep its social promises in view of the economic situation, especially since subsidized products will suffer increases, but even if the prices will not change for the consumer, there will be repercussions on the general budget. of State.

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