2023-10-30 19:52:18
With an overall score of 58 points, the Kingdom confirms the solidity and resilience of its financial sector, underlines the Absa Africa Financial Markets Index 2023 report which takes into account six evaluation criteria, namely: market depth, access to foreign exchange markets, market transparency, taxation and regulatory environment, local investor capacity, economic environment and transparency, and finally legal standards and their applicability.
Regarding the first criterion, Morocco climbs to second place with a score of 60 points, just behind South Africa (100 points), which testifies to the robustness of its financial market.
As for the second criterion, the Kingdom obtains the 3rd best score (76 points) in terms of access to foreign currencies, following South Africa (88 points) and Egypt (87 points). This is what largely explains Morocco’s progression in this ranking.
Concerning the third criterion, which assesses market transparency, taxation and the regulatory environment, Morocco is in fourth position. The fourth criterion, which assesses the capacity of local investors, places the Kingdom in seventh position, demonstrating the rise of local investors in the financial markets.
The fifth criterion, dedicated to the economic environment and transparency, ranks Morocco in 18th position, signaling opportunities for improvement in this specific area.
Finally, the sixth criterion, which assesses legal standards and their applicability, positions the Kingdom in 17th place, which highlights the need to further strengthen its legal framework.
Furthermore, here is the list of the 10 most developed financial markets in Africa: South Africa (88 points); Mauritius (77 points); Nigeria (67 points); Uganda (63 points); Namibia (63 points); Botswana (59 points); Kenya (59 points); Morocco (58 points); Ghana (58 points); Tanzania (55 points).
The report displays these findings, examining the extent to which African Financial Markets Initiative (MFMI) economies are conducive to foreign investment. It includes indicators relating to the stringency of capital controls, the flexibility of exchange rate regimes and the level of interbank liquidity in foreign currencies.
“Reporting foreign exchange data is considered a transparency measure. This pillar also assesses the ability of central banks to manage potential volatility in capital flows through the adequacy of foreign exchange reserves,” the report reads.
This progress by Morocco, indicates the report, follows the conclusions of the 2022 annual report of Bank Al-Maghrib which notes that “the average monthly volume of currencies exchanged once morest the dirham on the interbank market increased from 140 to 36 billion dirhams” . This equates to approximately $42.5 billion per year. The central bank said the sharp increase was due to “the continued deepening of the interbank foreign exchange market and the increase in the use of hedging instruments.”
However, Morocco was the exception, as many other countries experienced a decline in interbank turnover in the foreign exchange market last year. A Tanzanian bank explained in its survey that “the market has witnessed an increased tightening of dollar liquidity, with demand for dollars outstripping supply.” In Uganda, which was previously the third country by this measure, annual interbank foreign exchange turnover fell slightly to $28.3 billion. It also declined in Ghana, Nigeria and Kenya, where respondents reported growing concerns regarding a shortage of foreign exchange.
“It should be noted that IMFA ratings are awarded on a relative rather than absolute basis, so Morocco’s dramatic improvement contributed to a sharp decline in ratings for Uganda, Ghana, Nigeria and Kenya. Interbank liquidity in the foreign exchange market remains limited to negligible for other IMFA economies,” the report said.
1698724976
#Morocco #consolidates #continental #position
