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Analysis of the Influence of the Exchange Rate Reform and COVID-19 on the Real Exchange Rate of the Dirham using the BEER Methodology: Case of Morocco

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  • Mohammed Adil ICHOU
  • Omar ALLAKI
  • Driss RASSAM
  • Mounssef BOUAYAD
  • Aziz BABOUNIA

Abstract

This article assesses the deviation of Morocco's real effective exchange rate (REER) from its equilibrium, in the wake of the reform of the exchange rate regime and the COVID-19 crisis. Adopting the BEER approach, we examine the evolution of the dirham and discern the internal and external factors influencing its deviation. After elucidating the concept of the equilibrium rate, we detail the methodology employed. Our conclusions reveal the notable impact of the 2018 reform on the REER, marked by the widening of the dirham's fluctuation band, inducing a significant depreciation. In addition, the pandemic has accentuated economic vulnerability, with a recession of -7.2% in 2020. In short, economic equilibrium is essential if Morocco is to face up to the challenges that lie ahead. Competitiveness indicators must be rigorously monitored to guarantee Morocco's competitive position internationally. Â

Suggested Citation

  • Mohammed Adil ICHOU & Omar ALLAKI & Driss RASSAM & Mounssef BOUAYAD & Aziz BABOUNIA, 2023. "Analysis of the Influence of the Exchange Rate Reform and COVID-19 on the Real Exchange Rate of the Dirham using the BEER Methodology: Case of Morocco," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(6), pages 1-13.
    • Handle: RePEc:spt:admaec:v:13:y:2023:i:6:f:13_6_13
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    References listed on IDEAS

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