Morocco is emerging as one of the foremost financial markets in Africa and the Middle East and North Africa (MENA) region, stated Antoine Sallé de Chou, Director for Morocco at the European Bank for Reconstruction and Development (EBRD), during a seminar in Rabat.

Exploring derivatives market potential

Speaking at the opening of a seminar co-hosted by the EBRD and the Ministry of Economy and Finance, under the theme “Derivatives Market: International Trends and Development Prospects in Morocco,” Mr. Sallé de Chou highlighted the dynamism and growth of Morocco’s stock market, its diverse investor base, and relatively liquid debt market. He emphasized the critical role of the derivatives market in revitalizing Morocco’s financial sector, aligning it with international standards by enabling investors to manage market risks related to interest and exchange rates, optimize investment decisions, and mitigate associated risks.

Strategic importance of derivatives

Sallé de Chou further explained that the derivatives market is vital for banks to manage risks and for the Treasury to support the development of the sovereign debt market. He noted that capital market development is a priority for the EBRD in Morocco and its other operational countries.

Aude Pacatte, Portfolio Management Head at the EBRD, emphasized the crucial role derivatives play in the financial sector’s development and capital markets. She pointed out that these instruments allow autonomous market risk management, reducing contagion risks during crises and enabling the separation of asset and liability management decisions.

Advantages of derivatives

Pacatte also highlighted the flexibility and ease of execution of derivatives, along with their relatively limited counterparty risk compared to cash instruments. They enhance pricing and liquidity, particularly when legal frameworks for clearing and settlement in cases of insolvency are in place.

The seminar gathered national and international experts and professionals, including key financial sector stakeholders, to explore and assess the role of derivatives in the broader development of financial markets and the economy. The event provided a platform to share international experiences and discuss the next steps for developing Morocco’s derivatives market.

Future perspectives

The discussions underscored the importance of continuing to advance Morocco’s financial infrastructure to support the growth and stability of its markets. By integrating sophisticated financial instruments like derivatives, Morocco aims to enhance its financial market’s resilience and attractiveness to both domestic and international investors.