all you should know about ‘floating dirham’
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

All You should Know About ‘Floating Dirham’

Arab Today, arab today

Arab Today, arab today All You should Know About ‘Floating Dirham’

Dirham currency
Casablanca - Arab Today

Morocco’s central bank governor, Abdellatif Jouahri, announced in 2016 that Morocco is aiming to introduce a flexible exchange rate system in the midst of 2017. Indeed, the International Monetary Fund (IMF) had identified the reform of the exchange rate regime as an important milestone to increase the resilience of the Moroccan economy.

The IMF’s de facto classification of Morocco’s current exchange rate regime is referred to as “Conventional fixed peg arrangements”.

Indeed, Morocco pegs its currency within margins of ±0.3 percent or less vis-à-vis a basket of currencies: The dirham’s exchange rate is currently fixed via a peg that is 60 percent weighted to the euro and 40 percent to the dollar. (Prior to April 2015, it was fixed via a peg that was 80 percent weighted to the euro and 20 percent to the dollar).

In case of a shock, under the current exchange rate regime, significant pressure is put on foreign exchange reserves. Furthermore, and according to the experience of other countries, we know that a shock could also lead to a forced transition to a floating regime. These weaknesses could be significantly mitigated by a floating exchange-rate regime.

Unlike Egypt who was unprepared to take the dramatic step of allowing its currency to trade freely, Morocco’s reform will be gradual allowing for a smooth transition. Indeed, Morocco’s foreign exchange reserves currently cover more than seven months of imports; and the central bank has said it expects that to rise to eight months by the end of 2017.

Moreover, the macroeconomic environment is overall very favorable to this reform thanks the country’s efforts to curb its deficits and to decrease its public debt. According to the IMF, because Morocco has the proper prerequisites for the intended reform, the scenario under which the Moroccan dirham will plummet after gradual floating can be safely discarded.

The reform implies that the exchange rate will not be used as the nominal anchor of the system anymore. Instead, Morocco will operate an inflation targeting regime. Also, the prices of other currencies vis-à-vis the Moroccan dirham will be fully determined by the market’s supply and demand; and the only interventions in the foreign exchange market will be undertaken to ensure proper liquidity.

Source :Morocco World News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

all you should know about ‘floating dirham’ all you should know about ‘floating dirham’

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

all you should know about ‘floating dirham’ all you should know about ‘floating dirham’

 



GMT 12:48 2016 Sunday ,27 November

Cilic, Dodig push Croatia to brink of Davis Cup

GMT 05:24 2017 Thursday ,28 December

Erdogan says 'terrorist' Assad cannot be part of Syria

GMT 12:59 2016 Saturday ,05 November

WB welcomes economic reforms in Egypt

GMT 18:40 2016 Saturday ,05 November

Egyptian GDRs in London down

GMT 10:57 2017 Wednesday ,06 December

Peru striker Guerrero has doping ban extended

GMT 17:51 2017 Tuesday ,07 March

Trump Signs New Travel Ban on Six Muslim Countries

GMT 10:30 2017 Wednesday ,06 September

Saudi Information Ministry praises media role during Hajj

GMT 15:29 2017 Tuesday ,24 January

Mind games really do help your brain

GMT 06:55 2015 Thursday ,01 October

Boston Red Sox beat Yankees

GMT 08:17 2017 Monday ,28 August

Bahrain celebrates World Humanitarian Day 2017

GMT 02:07 2017 Tuesday ,28 February

Opposition seeks Russian support at Syria talks

GMT 11:06 2017 Wednesday ,27 December

Bahrain tourism projects valued at over $ 13 billion

GMT 20:35 2011 Tuesday ,10 May

New exhibition of Islamic ornaments

GMT 19:52 2016 Friday ,19 August

Nice joins wave of French towns banning burkinis

GMT 03:46 2017 Wednesday ,06 September

US-backed Syrian forces seize Raqqa mosque

GMT 22:22 2017 Friday ,15 December

BDF Military Museum open on National Day

GMT 09:47 2015 Wednesday ,02 December

Ryanair launches court action against Google, eDreams

GMT 10:46 2017 Wednesday ,22 March

Japan's February trade surplus hits multi-year high
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday