Doha – Bank Al-Maghrib (BAM) announced today the launch of an interbank forward market for foreign exchange swaps and overnight index swaps (OIS) linked to MONIA (Moroccan Overnight Index Average), set to begin operations on February 19.
The initiative is part of BAM’s broader strategy to deepen the foreign exchange market, which began in 2018.
According to the central bank’s press release, this new market will provide economic operators with “a transparent and reliable reference for their hedging operations against interest rate and exchange rate risks.”
The market introduces two key financial instruments. The first is the foreign exchange swap, which BAM describes as “a transaction whereby two parties agree to exchange one currency for another and then proceed with an opposite exchange at a later date.”
This instrument combines a spot foreign exchange transaction with a forward transaction, allowing market participants to manage their foreign exchange risk exposure while benefiting from enhanced flexibility and cost predictability.
The second instrument is the OIS linked to MONIA, which the central bank explains is “a transaction whereby two parties agree to exchange, on an agreed notional amount and period, a fixed interest rate determined at the time of the transaction against a variable interest rate indexed to the MONIA index.”
This tool is primarily designed to help financial market participants hedge against short-term interest rate fluctuations and derive market expectations about future short-term interest rates.
The establishment of this market has been made possible through active collaboration between market-making banks and the European Bank for Reconstruction and Development (BERD).
The initiative aims to give new momentum to the development of derivative products in Morocco.
The launch signifies a major leap in the modernization of Morocco’s financial instruments and is expected to strengthen the depth of the national capital market. It also aligns with the country’s objectives for the gradual liberalization of the dirham.
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