Economy News – Follow-up
The Central Bank of Morocco has announced the impending launch of a future market, set to commence on February 19, 2025. This initiative will feature trading in exchange rate contracts, including one-night interest rates linked to the average Moroccan interest rate index (Monia).
An exchange rate contract entails an agreement between two parties to swap currencies and subsequently reverse the transaction at a future date. This mechanism effectively integrates present and future payment processes, allowing participants to mitigate risks associated with exchange rate fluctuations, while capitalizing on enhanced flexibility and anticipated costs.
Additionally, the one-night interest rate initiative related to the average Moroccan interest rate index for repurchase transactions involves an agreement where one party exchanges a fixed interest rate—established at the time of the transaction—for a variable rate tied to the MONIA index. These transactions are conducted based on a nominal amount and over a predetermined period mutually agreed upon by the parties involved.
This financial instrument is predominantly utilized by market participants seeking to hedge against short-term interest rate variations. It also serves as a valuable tool for gauging market expectations regarding future movements in short-term interest rates.
The Central Bank emphasized that the establishment of the future market will provide economic players with a transparent and reliable benchmark for hedging operations against interest and exchange rate fluctuations. It also aims to invigorate the development of financial derivatives in Morocco.
The bank attributed the creation of this market to the effective collaboration of participating banks acting as market makers, along with the support of the European Bank for Reconstruction and Development.
To receive more news, subscribe to our channel on Telegram.
