Morocco will raise its investments in green, social and sustainable bonds to 10% of its foreign exchange reserves from 7% currently, the country's central bank governor said on Friday.

The central bank invested $200 million in the World Bank's green bonds last year, double the level in 2016, governor Abdellatif Jouahri said at a conference on climate change.

Drought has had a major impact on Morocco which is bracing for its sixth dry year in a row, threatening both the harvest and the water supply.

The macroeconomic impact of drought and its repercussions are "cause for concern," Jouahri said.

The central bank is working to provide banks with guidelines and indicators to measure climate-related risks emanating from major borrowers, he said.

The World Bank estimates Morocco's funding needs in combating climate change and mitigating its impacts at $78 billion between 2022 and 2050.

It expects drought to cost Morocco 6.5% of GDP and push nearly 2 million people to leave rural areas for towns and cities by 2050.

Climate change "affects growth, employment and inflation, the main variables on which monetary policy decisions are based," Jouahri said.

(Reporting by Ahmed Eljechtimi; editing by Christina Fincher)