Publication of the Circular No. 01/2018 on hedging operations

Following the implementation, on January 15, 2018, of the reform regarding the exchange system, the "Office des Changes" published on January 19, 2018 the Circular No. 1/2018 relating to hedging operations.

The new circular of the "Office des Changes" aims to set the terms and conditions for carrying out hedging operations against risks arising from transactions with foreign countries.

Circular No. 1/2018 diversified and eased hedging operations to meet the needs of banks, economic operators and financial institutions.

The implementation of hedging instruments, adapted to the changes in the Moroccan economy, will support the competitiveness of the Moroccan companies and will also contribute to their development on the international scene and will especially strengthen the implementation of the reform of the exchange system. This reform is a real step towards the emergence of the Moroccan economy.

Hedging transactions authorized by the exchange regulations include the following:

  • Hedging operations against currency risks;
  • Hedging operations against interest rate risk;
  • Hedging operations against the risk of commodity price fluctuations;
  • And hedging operations against any risk related to any asset or debt.

These hedging operations must be backed by common or capital transactions in relation to the business of the company. The backing-up consists of attaching the hedging operations to a common or capital transaction materialized by the presentation to the bank of any document binding the Moroccan operator and its foreign relationship in the completion of the transaction covered by the hedge.

In addition to the diversification of products, the new circular of the "Office des Changes" has eased the use of hedging operations in terms of combining several products at the same time and also in terms of compensation at the maturity date.

In fact, the bank can offer its client, economic operator or financial institution, a combination of instruments in the context of the same hedging operation.

In addition, hedging operations may result in the compensation of positions arising from these transactions.