BAM Report: Exchange rate regime transition is taking place “under good conditions”

The transition to a more flexible exchange rate regime, initiated in January 2018, continued to take place under good conditions, according to the annual report of Bank Al-Maghrib (BAM) on the economic, monetary and financial situation for the 2023 financial year.

The Central Bank has included the completion of this transition, as well as the establishment of the inflation targeting framework in its 2024-2028 strategic plan, indicates this report, noting that the dirham evolved throughout the year within the fluctuation band without intervention from BAM.

And to specify: “Given a favorable market effect, the dirham ended the year with an appreciation of 5.6% against the American currency and 2% against the euro.” The report also recalls that the quarterly assessments carried out by Bank Al-Maghrib indicated that the value of the national currency remained broadly in line with the fundamentals of the economy.

At the same time, the deepening of the foreign exchange market continued, with an increase in the volume of transactions on the interbank compartment of 74.7% to 754 billion dirhams (MMDH) and a significant use of hedging instruments. The latter totaled an amount of 258 MMDH, down 10% mainly due to the decline in international prices of energy products.