Political contests stymie Morocco exchange rate reform

Subject

Politics and exchange rate reform.

Significance

Plans to introduce a modest reform in mid-2017 to make the exchange rate system more flexible have been held up by political tensions. The delay has raised questions about the effectiveness of the coalition government formed in April, more than six months after the general election.

Impacts

• The political scene will remain highly charged, with simmering protests in the north.
• Power struggles within several of the leading political parties will also slow policymaking.
• Given the difficulty of the decision and uncertain political environment, politicians will wait to see what the king tells them to do.