International Journal of Science and Research (IJSR)
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Research Paper | Economics | Morocco | Volume 8 Issue 1, January 2019

The New Flexible Exchange Rate Regime in Morocco: A Tool to Improve National Economic Growth or a Further Burden on Exportations Dependency?

Moustapha Hamzaoui, Safaa El Yahyaoui

The exchange rate is a very important factor to take into consideration when it comes to any transactions or trades with foreign countries, especially a country like Morocco that relies hugely on importations to provide its supply in necessary staple goods such as petroleum, wheat and others goods that the country simply cannot afford the luxury of cutting out from the list of its imports. To carry such transactions, Morocco has to pay in foreign currencies such as euro and U.S. dollar due to the fact that most of Moroccos trades are done with European countries and that the U.S. dollar is a widely used currency on an international scale. Before adopting this new reform, the Moroccan currency (Dirham) was pegged to a basket of currencies and the exchange rate was fixed by the central bank of Morocco (Bank Al-maghrib) on a daily basis following the trends of the currencies in the said basket. This regime allowed the government to have control over the exchange rate, therefore having a tool to assess the risks of any agitated fluctuations on the market. Such stable rates were fitting pretty well with the monetary policies in the country, as well as the productive sectors relying on imported raw materials and mostly the supply of subsidized staple goods at more or less stable prices. The new reform will considerably affect the national economy in many ways, as the following analysis will show.

Keywords: exchange rate, foreign trade, currency, monetary policy, inflation, payment balance, central bank

Edition: Volume 8 Issue 1, January 2019

Pages: 1982 - 1986

How to Cite this Article?

Moustapha Hamzaoui, Safaa El Yahyaoui, "The New Flexible Exchange Rate Regime in Morocco: A Tool to Improve National Economic Growth or a Further Burden on Exportations Dependency?", International Journal of Science and Research (IJSR), https://www.ijsr.net/search_index_results_paperid.php?id=ART20194321, Volume 8 Issue 1, January 2019, 1982 - 1986

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