Bank Al-Maghrib (BAM), Morocco’s central bank, has reported that the transition to a more flexible exchange rate regime, initiated in January 2018, continues to unfold in good conditions.
In its annual report on the economic, monetary, and financial situation for the fiscal year 2023, BAM outlined that the completion of this transition and the implementation of an inflation-targeting framework are key components of its strategic plan for 2024-2028.
The report highlights that throughout the year, the Moroccan dirham traded within the fluctuation band with no intervention. “Taking into account a favourable market effect, the dirham ended the year up by 5.6 percent against the US dollar and 2 percent against the euro”, BAM stated.
The report also noted that the quarterly assessments of the Bank’s departments indicated that the value of the national currency remained broadly in line with the fundamentals.
The foreign exchange market further deepened, with trading volumes in the interbank market up 74.7 percent to 754 billion dirhams, and a significant increase in the use of hedging instruments. The latter totalled 258 billion dirhams, down 10 percent compared to previous year, reflecting primarily the drop in international energy prices.