Morocco’s real exchange rate falls 8.1%, strengthening exporters’ price position

Morocco’s dirham has been undergoing a sustained real depreciation since September 2025, making Moroccan goods and services relatively cheaper against those of its trading partners. This looks less like a brief currency fluctuation than a broader improvement in price competitiveness—although cheaper production in international terms does not automatically translate into more export orders.

The real effective exchange rate, which measures the currency against a trade-weighted basket after adjusting for relative prices, reached 93.5 in September 2026. That is its lowest reading in records going back to 2015. The descent has been persistent, with only occasional pauses, and the index fell a further 3.0% over the latest three months.

The nominal effective exchange rate declined just 3.5% over the latest year, ending at 114. That smaller move is central to the story: changes in currency quotations account for only part of Morocco’s real depreciation. The rest points to Moroccan prices rising more slowly than prices in its trading partners, or falling relative to them.

This does not require outright deflation in Morocco. Domestic prices can still rise while the country becomes relatively cheaper, provided inflation abroad is higher. Softer food-price pressures or restrained growth in other domestic prices would be plausible contributors. Food costs are particularly sensitive to agricultural conditions in Morocco, so an easing of supply pressures could help produce such a gap. The important distinction is between a lower relative price level and a falling domestic cost of living.

The currency regime also matters. Morocco manages the dirham against a basket linked to the euro and dollar, rather than allowing it to float freely. Movements between those currencies can therefore influence its value against different trading partners without a discretionary devaluation. The nominal decline is consistent with that mechanism; the larger real decline indicates an additional relative-price effect.

For automotive suppliers, textiles producers and other manufacturers selling into Europe, the shift would tend to create room to cut foreign-currency prices or preserve prices and earn better margins in dirhams. Tourism businesses could also become more attractive relative to competing destinations. But a broad price index does not measure each exporter’s wages, productivity or factory costs, so the competitive gain will vary across businesses.

Imported components, machinery and energy complicate the benefit. Nominal depreciation can raise their dirham cost, squeezing manufacturers that rely heavily on foreign inputs. Households may likewise face dearer imported goods even as Morocco becomes relatively cheaper internationally.

The next test is whether exporters turn that price advantage into higher sales volumes and stronger margins. Watch domestic inflation against trading-partner inflation, imported input costs and demand in Europe. If Moroccan costs accelerate or external demand weakens, the apparent competitive opening could narrow before businesses fully exploit it.

Analysis by MENACodex. The reasons and effects discussed are our reading; every figure traces to official data.