Macroeconomic stability factors of the USD/MAD exchange rate in the context of an open Moroccan economy

Abstract:

This article aims to analyze the factors of the USD/MAD exchange rate in Morocco for the period from 1980 to 2018. We have used the ARDL model to verify the long-term stable relationship for a threshold of 1% between the USD/MAD exchange rate and its explanatory variables.

The results of our study show that in a long-term perspective, direct foreign investments, the money stock (M3), and the interest rate have a positive impact on the USD/MAD exchange rate, whereas the consumer price index, the exchange reserves, and the stock of external public debt have a negative impact on the USD/MAD exchange rate.

 

Keywords: ARDL, exchange rate, direct foreign investments, external public debt, interest rate.