A currency dealer counts Moroccan dirhams in a photo illustration at a currency exchange point in Casablanca, Morocco,June 29, 2017. REUTERS/Youssef Boudlal/Illustration
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In five decades of importing steel wires, Zahar Benmoussa's company never worried about currency risks – until Morocco announced plans to float the dirham.Across Morocco, fears of a weaker dirham triggered a rush for dollars and euros, causing a $3 billion drop in its reserves in just three months this year.Prime Minister Saaddine El-Otmani said July 1 that the first phase will allow the currency to fluctuate within a daily range of 5 percent, up from 0.6 percent currently.The dirham is pegged to a two-currency basket weighted 60 percent to the euro and 40 percent to the U.S. dollar. It has fallen 4.4 percent against the euro this year, and touched a three-year low of 11.1831 per euro last week.The premier wants to investigate what volatility or depreciation would mean not only for the purchasing power of Morocco's 34 million people, but also for companies doing business abroad, he said.Unlike Egypt prior to its float, Morocco has an investment-grade credit rating and an expanding private sector.
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