Workshop in Rabat on LIBOR Reform & Morocco’s New Money Market Benchmark

Morocco’s Central Bank, Bank Al-Maghrib, and the European Bank for Reconstruction and Development organized on Wednesday in Rabat a workshop on London Inter-bank Offered Rate (LIBOR) reform and the new money market benchmark in the North African country.

Participants in the workshop discussed the implications of changes in the benchmark indexes used on the international markets, and shared with all interested parties the outcome of the process for choosing the new money market benchmark index for Morocco, to be published in January 2020.

A joint press release issued by Bank Al Maghrib and EBRD says an ad-hoc working group, set up in 2018, recommended the use of the rate for overnight repo transactions as the risk-free rate for the Moroccan money markets.

This working group includes representatives from the Ministry of economy & finance, Bank Al-Maghrib, the Moroccan Capital Markets Authority, the Association of Moroccan Management Companies and Investment Funds, and Moroccan banks.

Supported by technical assistance from the EBRD, this group was tasked with setting up a viable alternative risk-free rate for the Moroccan money markets.

Managing Director of Bank Al-Maghrib, Abderrahim Bouazza, praised the reform, which is in line with recent changes made in the international money markets.

It was “an important milestone to strengthen transparency and add depth to the market so as to develop a broader set of products and instruments for those in the financial sector”, he stressed.

For his part, EBRD Vice Pdt Alain Pilloux said: “We welcome Morocco to the small club of countries which have already developed robust and transparent risk-free rate benchmarks”.

He also described the move as “an important step towards the development of an interest rate swap market in Morocco”.