Morocco to launch a new exchange rate regime on Monday

The Ministry of Economy and Finance, after consulting with Bank Al-Maghrib (central bank), has decided to adopt, on Monday, a new exchange rate regime where the parity of the dirham is determined within a band of fluctuation of ± 2.5%, against ± 0.3% currently, compared to a central rate set by the Bank Al-Maghrib on the basis of a currency basket composed of the euro and the US dollar by up to 60% and 40% respectively.

Under the new regime, Bank Al-Maghrib will continue to intervene on the foreign exchange market to ensure its liquidity, said on Friday the Ministry of Economy and Finance in a statement.

The reform is undertaken under favourable conditions marked by the solidity of the financial sector and the consolidation of macroeconomic bases, including an appropriate level of foreign exchange reserves and a controlled inflation, the ministry added, noting that the latter will also be supported by the structural and sectoral reforms.

The ministry explained that the exchange rate regime reform is meant to strengthen the resilience of the national economy to exogenous shocks, to support its competitiveness and to improve its level of growth. It would support the structural changes taking place in the Moroccan economy over the recent years, particularly in terms of diversification, openness and integration into the global economy, it said.