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Economy

Currency Lessons: Sept 11, 2025 – Finance Explained!

by Daniel Foster - Senior Editor, Economy
written by Daniel Foster - Senior Editor, Economy

Moroccan Dirham Resilience: Forecasting Currency Trends & Investment Strategies for 2026

Could the Moroccan Dirham be poised for unexpected stability amidst global economic shifts? Recent data from Bank Al-Mghryib, detailing foreign currency exchange rates as of September 11, 2025, reveals a complex landscape. While fluctuations against major currencies like the Euro (10.2509 – 11.9133) and the US Dollar (8.7675 – 10.1893) are evident, a closer look suggests potential for strategic opportunities for investors and businesses operating within Morocco. This article delves into the underlying factors influencing these rates and forecasts potential trends, offering actionable insights for navigating the evolving financial environment.

Decoding the Current Exchange Rate Landscape

The exchange rates published by Bank Al-Mghryib paint a picture of moderate volatility. The Canadian Dollar (6.3166 – 7.3410), British Pound (11.8450 – 13.7650), and even the Gibraltar Pound (11.8450 – 13.7650) show considerable ranges, reflecting global market uncertainties. Notably, currencies pegged to oil prices, like the UAE Dirham (2.3871 – 2.7741) and the Qatari Riyal (2.4051 – 2.7951), exhibit tighter bands. This correlation highlights Morocco’s sensitivity to energy market dynamics, despite its increasing investment in renewable energy sources.

Key Takeaway: The Moroccan Dirham’s performance isn’t isolated. It’s intricately linked to global commodity prices, geopolitical stability, and the economic health of Morocco’s key trading partners.

The Rise of Regional Currency Blocs & Their Impact

One significant trend to watch is the increasing formation of regional currency blocs. While not immediately impacting the Dirham, the strengthening economic ties within the Gulf Cooperation Council (GCC) and the potential for a unified currency could indirectly influence Morocco’s trade relationships. A stronger GCC currency could lead to increased purchasing power for Moroccan exports, but also potentially increase the cost of imported goods from the region.

“Did you know?” The Moroccan government is actively exploring strengthening trade ties with African nations, aiming to reduce reliance on traditional European markets. This diversification strategy could provide a buffer against fluctuations in major global currencies.

The Yen’s Weakness: A Potential Opportunity?

The relatively weak Japanese Yen (5.9320 – 6.8940) presents a unique scenario. Japanese investment in Moroccan infrastructure projects has been growing, and a weaker Yen could incentivize further investment. However, this also depends on broader global economic conditions and Japan’s own monetary policy.

Future Trends: Forecasting the Dirham’s Trajectory

Several factors suggest a potential for increased Dirham stability in the medium term (2026-2027). Morocco’s commitment to fiscal discipline, coupled with its ambitious renewable energy program, is attracting foreign investment. Furthermore, the country’s strategic location as a gateway to Africa is positioning it as a key regional hub.

Expert Insight: “Morocco’s proactive approach to economic diversification and its focus on sustainable development are key differentiators. These factors are likely to bolster investor confidence and support the Dirham’s value.” – Dr. Amina Benali, Economist specializing in North African markets.

However, potential headwinds remain. Global inflation, rising interest rates in developed economies, and geopolitical instability could all exert downward pressure on the Dirham. Monitoring these factors will be crucial for businesses and investors.

Actionable Insights for Investors & Businesses

So, what does this mean for those operating in or investing in Morocco? Here are a few key strategies:

  • Diversify Currency Exposure: Don’t rely solely on the Dirham. Consider hedging strategies or diversifying investments across multiple currencies.
  • Focus on Long-Term Value: Morocco’s long-term economic fundamentals remain strong. Focus on investments with a long-term horizon.
  • Monitor Global Economic Indicators: Stay informed about global economic trends, particularly those related to energy prices, inflation, and interest rates.
  • Explore Investment Opportunities in Renewable Energy: Morocco’s renewable energy sector is booming, offering attractive investment opportunities.

“Pro Tip:” Utilize forward contracts to lock in exchange rates for future transactions, mitigating the risk of currency fluctuations.

The Role of Fintech & Digital Currency

The increasing adoption of fintech solutions and the potential for digital currencies could also play a role in shaping Morocco’s financial landscape. While a central bank digital currency (CBDC) is still under consideration, the growth of mobile payment systems and digital wallets is already impacting currency flows and financial inclusion.

Frequently Asked Questions

What factors influence the Moroccan Dirham’s exchange rate?

The Dirham’s exchange rate is influenced by a complex interplay of factors, including global economic conditions, commodity prices (especially oil), Morocco’s trade balance, and investor confidence.

Is the Moroccan Dirham likely to appreciate or depreciate in the near future?

Forecasting currency movements is inherently difficult. However, Morocco’s strong economic fundamentals suggest potential for stability, with a slight appreciation possible if the country continues to attract foreign investment and diversify its economy.

How can businesses mitigate the risk of currency fluctuations?

Businesses can mitigate currency risk through hedging strategies, diversifying currency exposure, and utilizing forward contracts to lock in exchange rates.

What is Morocco’s stance on cryptocurrencies?

Morocco currently maintains a cautious approach to cryptocurrencies, with no formal legal framework in place. However, the government is actively exploring the potential of blockchain technology and considering the feasibility of a CBDC.

The Moroccan Dirham’s future is intertwined with a complex web of global and regional forces. By understanding these dynamics and adopting proactive strategies, investors and businesses can navigate the evolving financial landscape and capitalize on the opportunities that lie ahead. What are your predictions for the Dirham’s performance in the coming year? Share your thoughts in the comments below!



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Economy

Cash Still King: Digital Payments & Cash Usage Trends

by Daniel Foster - Senior Editor, Economy
written by Daniel Foster - Senior Editor, Economy

Morocco’s Cash Paradox: Why Bills Are Booming While Digital Payments Rise

While the world races towards a cashless future, Morocco is bucking the trend. Cash in circulation has surged nearly 80% over the last five and a half years, reaching 449.8 billion Moroccan Dirhams (MMDH) by June 2025. This isn’t a temporary blip; it’s a deeply rooted economic reality that reveals a fascinating – and potentially problematic – divergence from global norms. Understanding this cash dominance is crucial for businesses, investors, and policymakers navigating the Moroccan market.

The Two Faces of Moroccan Finance

The Moroccan payments landscape presents a stark dichotomy. On one side, digital payments – bank transfers and card transactions – are experiencing robust growth. The volume of scriptural (non-cash) operations more than doubled between 2019 and 2024, hitting 625 million transactions valued at 5,542 MMDH. Bank transfers, particularly instant transfers, are leading the charge, formalizing business-to-business transactions and wage payments. Bank cards, with 22.6 million units in circulation, are becoming increasingly popular for everyday retail spending.

Yet, despite this digital progress, cash remains king. Its consistent growth – 20% in 2020, 6% in 2021, 11% in both 2022 and 2023 – demonstrates a resilience that defies international trends highlighted in reports from McKinsey, the European Central Bank (ECB), and Worldpay. These global analyses consistently point towards dematerialization, with digital wallets and cards gaining ground and cash steadily declining.

The Roots of Cash’s Continued Reign

Several interconnected factors underpin Morocco’s unique situation. A significant portion of the economy operates within the non-structured sector, functioning outside the formal banking system. This informal activity naturally favors cash transactions. Furthermore, financial inclusion remains a challenge, leaving a substantial segment of the population without access to banking services. Finally, deeply ingrained socio-cultural preferences contribute to a widespread habit of holding cash.

Even a recent tax amnesty, which temporarily encouraged banking of cash, only provided a fleeting moderation in the overall trend. This suggests the underlying drivers are far more powerful than short-term incentives.

The Declining Check: A Relic of the Past

While cash thrives, the check is rapidly becoming obsolete. Usage has fallen 13% in the last five years, with only 30.1 million operations recorded in 2024. Interestingly, the overall value of checks remains relatively stable, indicating a shift in their purpose – they are now primarily used for high-value, specific transactions rather than mass payments. However, a high rejection rate (3.23%) is eroding confidence and accelerating its decline.

Instant Transfers: A Key Driver of Digital Adoption

The rise of instant transfers is a particularly noteworthy development. Representing 3% of all scriptural transactions, this technology is streamlining payments and fostering greater transparency, especially within the formal economy. Its convenience and speed are attracting both businesses and individuals, contributing to the overall growth of digital payments. This aligns with broader global trends towards real-time payment systems, as discussed in a recent report by the Bank for International Settlements: https://www.bis.org/publ/work898.htm

Looking Ahead: Bridging the Digital Divide

The persistence of cash in Morocco isn’t necessarily a sign of resistance to modernization, but rather a reflection of the country’s unique economic and social structure. The challenge lies in bridging the gap between the formal and informal economies, expanding financial inclusion, and addressing the cultural factors that favor cash.

Future strategies will likely focus on incentivizing digital payment adoption among the unbanked population, promoting financial literacy, and leveraging mobile technology to reach remote areas. Furthermore, strengthening regulatory frameworks to combat illicit financial flows within the cash-based informal sector will be crucial. The success of these efforts will determine whether Morocco can fully participate in the global shift towards a more digitalized economy.

What steps do you think are most critical to reducing Morocco’s reliance on cash? Share your insights in the comments below!

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Economy

TPE & Bank Credit: A Prudential Framework

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Morocco Central Bank Enhances Financial Support For Micro-Businesses

Table of Contents

Rabat,Morocco – Bank Al-Maghrib (BAM),Morocco’s central bank,is rolling out enhanced financial support programs aimed at boosting access to credit for the nation’s micro-businesses.This initiative, announced July 1, 2025, addresses the persistent challenges very small enterprises (VSEs) face in securing necessary funding for growth and stability.

The central bank’s strategy centers on leveraging Tamwilkom, a public guarantee establishment, to play a pivotal role in facilitating credit access for these smaller economic structures. The move comes as VSEs, despite their vital contribution to the national economy, frequently enough struggle to meet the stringent requirements of customary bank financing.

Tamwilkom’s Central Role In Guaranteeing Credit

Tamwilkom is set to become a cornerstone in the new framework, offering guarantees to banks willing to extend credit to micro-businesses.This intervention aims to mitigate the perceived risk associated with lending to VSEs, which often lack the extensive collateral required by conventional lending practices.

Abdelatif Jouahri, Wali of Bank Al-Maghrib, emphasized the importance of a tailored prudential framework to manage the unique aspects of Tamwilkom’s guarantee activity, drawing parallels with prosperous experiences involving the Caisse de Dépôt et de Gestion (CDG). Currently, banks are on the front lines for credits less than a million dirhams.

New Measures To Bolster Bank Financing

To further incentivize bank participation, Bank al-Maghrib launched a bank support program in March, featuring a bonus rate refinancing line. This measure lowers the key rate by 25 basis points, providing a financial incentive for banks to increase their lending to VSEs. Though, officials acknowledge that more is needed.

A national scoring system is also under development to standardize risk assessments across financial institutions, reducing disparities in internal policies and creating a more level playing field for micro-businesses seeking financing.

Prudential Framework Aligned With international Standards

Bank Al-maghrib is developing a differentiated prudential framework that aligns with international Basel principles, while accounting for the specific nature of Tamwilkom’s guarantee operations.This framework will carefully scrutinize the quality of the TPE (very small enterprise) portfolio to ensure financial stability.

According to Bank Al-Maghrib, this solvency requirement seeks to align public instruments on economic cycles, learning from past experiences where rapid deployments without strict budgetary frameworks led to imbalances. Discussions are ongoing with banks, Tamwilkom, and other public institutions to establish consistent guarantee trigger thresholds based on the beneficiaries’ risk profiles.

Charter For Very Small Businesses

A charter dedicated to very small businesses is in its final stages of development.This charter aims to establish harmonized risk assessment standards. Sectoral federations, Morocco SMEs, and employers will collaborate to ensure a homogeneous risk assessment and reporting system for TPE credits, fostering greater transparency and consistency across the sector.

Key Components Of The New Micro-Business Finance Program

Component Description
Tamwilkom Guarantees Public guarantee establishment playing a key role in granting credits to small economic structures.
Bonus Rate Refinancing bank support program launched in March, lowering the key rate by 25 basis points.
Differentiated Prudential Framework Aligned with Basel principles, tailored to the specifics of Tamwilkom’s guarantee activities.
National Scoring System Standardizing risk assessment across financial institutions.
Charter For VSEs Establishing harmonized risk assessment standards through collaboration with sectoral federations and employers.

Disclaimer: This article provides general financial facts and should not be considered financial advice. Consult with a financial professional for personalized guidance.

The Enduring Importance Of Micro-Businesses

Micro-businesses are the lifeblood of many economies, especially in emerging markets like Morocco. they provide employment, drive innovation, and contribute significantly to overall economic growth. However, their size often makes them vulnerable to economic shocks and limits their access to traditional financing avenues.

initiatives like the one launched by Bank Al-Maghrib are crucial for fostering a more inclusive financial ecosystem, enabling these businesses to thrive and contribute fully to the nation’s prosperity. According to a 2024 report by the World Bank, improved access to finance for smes can boost economic growth by up to 2% annually.

Pro Tip: Micro-businesses seeking financing should prepare detailed business plans and financial projections to demonstrate their creditworthiness to potential lenders.

Frequently Asked Questions

  • What is the main goal of Bank Al-Maghrib’s new finance program?
    The main goal is to enhance financial support for micro-businesses by improving their access to bank credit.
  • how does Tamwilkom support micro-businesses?
    Tamwilkom acts as a public guarantee establishment, helping micro-businesses secure credits by mitigating risks for lending banks.
  • What is the significance of the new charter for very small businesses?
    The charter aims to standardize risk assessments, ensuring fair and consistent evaluation of credit applications from TPEs.
  • Why is a differentiated prudential framework necessary for tamwilkom?
    A tailored prudential framework is necessary to specifically manage the unique risks associated with Tamwilkom’s guarantee activities, aligning with international standards while adjusting for the specifics of a guarantee organization.
  • How will the national scoring system benefit micro-businesses?
    The national scoring system will standardize risk assessments across different financial institutions, reducing disparities and creating a more level playing field for micro-enterprises seeking credit.

What are your thoughts on this new initiative? How do you think it will impact micro-businesses in Morocco? Share your comments below!

Here are two PAA (Potentially Answerable) related questions based on the provided text:

TPE & Bank Credit: Building a Robust Prudential Framework

Understanding and effectively managing Total Portfolio Exposure (TPE) is critical for the health of any financial institution. This article delves into the intricacies of TPE within the context of a robust prudential framework, specifically focusing on its implications for bank credit and overall financial stability. We’ll explore risk management strategies,regulatory compliance,and real-world examples to provide a extensive view.

Defining Total Portfolio exposure (TPE)

Total Portfolio Exposure (TPE) represents a bank’s overall financial risk stemming from its various credit activities. This includes loans, commitments, guarantees, and other credit-related exposures. A thorough understanding of TPE is paramount for accurately assessing and managing a bank’s risk profile. Banks need to monitor this carefully to avoid any systemic risk from occurring.

Components of TPE

TPE encompasses a wide range of credit instruments. The main components include:

  • Loans: This is the most common type of bank exposure.
  • Loan Commitments: Agreements to provide credit in the future.
  • Guarantees: Promises to cover the debt of others.
  • letters of Credit: Financial instruments that guarantee payment.
  • Trading Book Exposures: Credit risk from trading activities.

The Prudential Framework: A Cornerstone of Stability

A prudential framework provides the regulatory guidelines and oversight necessary to ensure the stability and soundness of the banking system. This framework is designed to mitigate risks, safeguard depositors’ interests, and maintain confidence in the financial system. Effective framework help to reduce the amount of non-performing loans.

key Elements of a Prudential Framework for TPE

The prudential framework incorporates several key elements to govern and monitor TPE effectively. These are critical for bank supervisors and institutions alike. Key elements include:

  • Capital Adequacy: Banks must maintain adequate capital to absorb potential losses related to TPE. This is frequently enough measured through risk-weighted assets.
  • Risk Management Practices: Robust internal risk management systems are crucial for identifying, measuring, monitoring, and controlling credit risk.
  • Loan Classification and Provisioning: Proper classification of loans (e.g.,performing,non-performing) and adequate loan loss provisions are essential for reflecting the true credit quality of the portfolio.
  • supervisory Review: Regular bank supervision and examination by regulatory authorities ensure compliance with the framework and assess the effectiveness of risk management practices.

Risk Management Strategies to Optimize TPE

Banks employ various risk management strategies to effectively manage their TPE and maintain a healthy portfolio. These range from basic risk assesment to more in depth risk strategies. Implementing and staying up to date with the best strategies is crucial.

Essential Risk Management Techniques

Effective risk management involves several techniques:

  • Credit Risk Assessment: Thoroughly assess creditworthiness before extending credit.
  • Portfolio Diversification: Diversify exposures across different industries, geographies, and borrowers to reduce concentration risk.
  • Credit Limits: Establish clear credit limits for individual borrowers and portfolios.
  • Stress Testing: Conduct stress tests to assess portfolio performance under adverse economic scenarios.
  • Collateral Management: Secure and manage collateral efficiently to safeguard against loan losses.
  • Early Warning System: Implement an early warning system to spot distressed borrowers and take remedial action.

regulatory Compliance and Basel Accords

The Basel Accords are international banking regulations that provide a framework for risk-based capital requirements. These are essential for maintaining and improving the stability for banks across the world. These guidelines are essential for any bank to operate within.

Basel Framework and TPE Impact

The Basel Accords, particularly Basel III, have significantly impacted how banks manage their TPE. key areas addressed include:

  • Credit Risk Capital:** banks are required to calculate credit risk capital using standardized approaches or internal ratings-based (IRB) approaches, based on their specific business models.

    • Risk Weighting: Credit exposures are assigned risk weights based on the credit rating of the borrower or the nature of the exposure.

  • Capital Conservation Buffer: Banks are required to maintain a capital conservation buffer to withstand economic downturns.
Basel Accord Key Focus Area Impact on TPE
Basel I Capital Adequacy Established basic risk-weighting for credit exposures.
Basel II Risk Assessment (Advanced approaches) Allowed for internal ratings-based approaches to assessing credit risk.
Basel III Capital and Liquidity Increased capital requirements, established capital buffer and liquidity standards.

Real-World Examples and case Studies

Understanding how TPE plays out in real-world scenarios highlights the critical importance of strong risk management practices. Here are a couple of case studies that illustrate the importance of TPE management:

The 2008 Financial Crisis

The 2008 financial crisis starkly demonstrated the consequences of inadequate TPE management, particularly related to mortgage-backed securities (MBS). The excessive leverage and interconnectedness of financial institutions amplified the impact of subprime mortgage defaults, leading to a systemic collapse.

Case Study: A Bank’s Loan Concentration

Consider a bank highly exposed to the real estate sector. If a meaningful economic downturn affects this sector, the bank’s loan portfolio- TPE- could be significantly impaired, leading to losses. Prudent management dictates portfolio diversification and stress testing to mitigate this risk.

Best Practices for Managing TPE

Implementing best practices is crucial for effectively protecting yoru TPE

Key Recommendations

  • Establish clear risk appetite statements: Define the level and types of risk the bank is willing to take.
  • Implement robust credit policies and procedures: Ensure consistent credit underwriting and monitoring.
  • Foster a strong risk culture: Promote risk awareness and accountability throughout the institution.
  • Invest in advanced risk management tools and technologies: Utilize data analytics to improve risk assessment and monitoring.
  • Seek autonomous verification and validation: ensure the risk management framework functions correctly.
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