*Morocco working with IMF on currency reforms* Cenbank sees gradual liberalisation of dirham* Finance minister says local sukuk before summer By.
Morocco plans to start the process of floating its dirham currency by June, the central
bank governor said on Tuesday, setting a tight schedule for a key part of an economic liberalisation programme agreed with international lenders.
In comments to Reuters, Abdellatif Jouahri also said the process to full exchange rate flexibility might take 15 years.
North Africa’s biggest energy importer, Morocco has been working with the International Monetary Fund on liberalising its currency as its finances have strengthened, helped in part by lower global oil prices.
Late last year, the government said the first stages of a move to a flexible exchange rate would be implemented in the second half of 2017.
On Tuesday Jouahri signalled an earlier start.
“We will begin the first phase of liberalising the dirham in the second quarter,” he said at an Arab finance ministers meeting in Rabat. “I can’t tell how long the duration of each phase will take, it depends on the market.”
The dirham’s exchange rate is currently tightly controlled via a 60 percent weighting to the euro and 40 percent to the dollar.
Last year sources told Reuters Morocco was considering widening the official fluctuation bands for the currency by around 5 percent in 2017.
Jouahri said last June the currency reform would kick off in early 2017, without specifying what measures that would entail.
A source at the central bank said there had been discussions about pushing back the start to the second half of the year because of the delay in setting up a government after the October elections.
A new government was since formed in April led Prime Minister Saad Eddine el-Othmani of the Islamist PJD party.
Finance Minister Mohamed Boussaid said on Tuesday the planning had been for the second half of the year, but if the central bank decided on the second quarter it would be opportune because of the strong value of the dinar.
He said delaying currency reforms could fuel inflation, which would reflect some of the difficulties faced by Egypt after it floated its pound currency last year.
The minister also said Morocco planned to issue a local sukuk bond before the summer but there were currently no prospects for an international sukuk.
Last year, the minister said Morocco would issue its first ever domestic Islamic bond in the first half of 2017.
Islamic banks and insurers are setting up in Morocco after it adopted legislation allowing them into the domestic market.
The central bank has set up a central sharia board with the
country’s body of Islamic scholars to oversee the new industry.
Source: Morocco to start liberalising dirham by June -cenbank – Nasdaq.com
