Mohammedia – Morocco is poised to be included in a new frontier market local currency debt index being prepared by JPMorgan, a move that could boost the country’s visibility among global investors and deepen interest in its domestic bond market.
According to an exclusive report by Reuters, the Wall Street bank is finalizing plans for the index after months of consultations with major asset managers. An announcement is expected by mid-year, with a formal launch likely in 2027, sources told the news agency.
The new benchmark will track local-currency government bonds from between 20 and 25 frontier economies. Morocco is expected to be among the countries with the largest weightings, alongside Egypt, Vietnam, Kenya, Nigeria, and Bangladesh, according to investors familiar with the discussions.
The index is designed to capture a segment of global debt markets that has been growing quietly but steadily. Unlike dollar-denominated bonds, local currency debt allows investors to gain exposure to domestic interest rates and currencies, while offering governments a way to borrow without taking on foreign exchange risk.
Under the proposed structure, no single country will be allowed to account for more than 8% of the index, a cap intended to prevent excessive concentration.
Earlier drafts had suggested a 10% ceiling. Eligible bonds will also need to meet a minimum size of around $250 million, ensuring enough liquidity for large institutional funds.
For Morocco, inclusion would mark another step in its gradual integration into global capital markets.
The country has spent years building a relatively deep and stable local bond market, supported by predictable issuance, a broad domestic investor base, and cautious macroeconomic management. Being part of a JPMorgan index could encourage more foreign funds to follow suit.
JPMorgan already runs several of the world’s most widely tracked emerging market debt benchmarks, which many fund managers use both to structure portfolios and to measure performance. That influence is one reason the planned index is drawing close attention.
Frontier market local currency debt has delivered strong returns in recent years, helped by a weaker US dollar and sharp rallies in countries such as Argentina and Ecuador.
According to estimates cited by Reuters, the amount of tradable frontier local currency debt has grown to roughly $1 trillion, triple its size a decade ago.
Analysts say the new index could also help support the development of local bond markets in countries like Morocco. Institutions such as the World Bank and the IMF have long argued that stronger domestic debt markets reduce the risk of financial crises triggered by currency swings.
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