The exchange rate of the Moroccan dirham upheld stability for the third day, following the enforcing of a decision to move to Morocco's flexible exchange system.
The rate against the dollar yesterday was slightly higher at 0.09 percent, compared to the day before.
According to JP Morgan, Morocco’s central bank discretion about the new date of the launch of the reform allowed it to “limit pre-emptive demand for foreign currency.”
In addition, the American bank explains that the shock-effect of greater exchange rate flexibility should be much more muted now compared to April 2017, “as some policy steps towards exchange rate flexibility have been expected for some time already and fears of a large devaluation have been dispelled.”
JP Morgan believes that the alignment of the dirham close to its fair value combined with a limited Foreign Exchange open position in the financial and corporate sectors “explain why the currency has not come under pressure and has remained well within the band since the central bank announcement.”
“Foreign Exchange loans were only 2.7 percent of total loans in the banking system in 2017 and banks’ net open foreign exchange positions to tier 1 capital had narrowed from 10 percent in 2010 to 4 percent at the start of 2017,” added the bank.