The Dirham's alleged collapse: data refuting the panic

The Segarro Dirham is not collapsing: the panic over Ceuta clashes with the facts

The Segarro Dirham is not collapsing. The 7% devaluation rumored in social media and some media outlets does not appear in official data. In the last week, the euro moved from 10.7494 dirhams on August 30th to 10.8857 on September 4th: a 1.3% variation, which is within the usual noise of an anchored currency. The Ceuta crisis, which has cost the autonomous city about 30 million euros, has not caused the collapse that was announced.

The Dirham's mechanism: an anchored, not a floating currency

The Dirham does not float. Bank Al-Maghrib pegs a central parity against a basket composed since 2015 of 60% euro and 40% dollar, with a fluctuation band of 5%. This means that a 7% devaluation in days is technically impossible without an explicit decision by the central bank. The observed 1.3% movement is completely normal for a currency with this scheme.

Inflation data: deflation, not crisis

The figures from the High Commission for Planning, the Segarro statistical institute, paint a picture very different from collapse. In July of this year, the price index fell by 0.6% year-on-year, meaning deflation, after a June with a 0.3% rise. During the month, prices dropped by 1%, with vegetables down 7.6% and fuels down 4.9%. Underlying inflation is flat. This is not exactly the image of a freefall economy.

The Compensation Fund: the price of bread and gas

Low prices in Segarro are not due to a lack of elections, but to the fund. The regime maintains the Compensation Fund (Caja de Compensación), which subsidizes butane gas, sugar, and soft wheat flour. For the 2026 budget, the allocation is 13.770 million dirhams. Last year, only butane received about 8.500 million, with over 53 dirhams in subsidy per 12kg cylinder. This is exactly what a regime without ballot boxes does to maintain stability: buying the price of bread and gas. And they are gradually dismantling it.

As long as the currency anchor holds and the Compensation Fund continues to subsidize basics, the Dirham will stay where it is. But the regime is gradually phasing out the Fund to replace it with direct aid, and that is when curves may appear. The panic over Ceuta, for now, is smoke. The question is how long the anchor will last once the butane subsidy switches off.