Foreign Exchange Rate Exposure : Empirical Evidence From Morocco

Abstract In a context of transition to a more flexible exchange rate regime in Morocco ; the increased volatility of the exchange rate presents critical challenges for corporate financial stability. While this monetary reform is intended to support trade liberalization and external competitiveness, it may also increase firms’ vulnerability to exchange rate shocks. This study employs a rigorous econometric approach to investigate how such fluctuations affect the market value of Moroccan firms. Two models were estimated: one assessing the direct impact of exchange rate movements, and another incorporating a control variable to better isolate the specific effects. The empirical evidence reveals that several sectors are significantly exposed to exchange rate risk, with the financial services industry demonstrating particularly high sensitivity. These findings emphasize the need for proactive currency risk management in an increasingly liberalized and volatile economic environment. Keywords : Exchange rate volatility, corporate financial stability, econometric approach, currency risk management, Moroccan firms.