Moroccan Dirham Drops Over 7% Against Pound Sterling, Weakens vs Dollar

In its latest weekly note "Weekly MAD Insights - Currencies", the Attijariwafa Bank subsidiary reported this volatility of the dirham. During the week of May 24 to 28, 2021, reports Map, the dirham depreciated against the dollar, going from 8.81 to 8.85, an evolution of the USD (US dollar)/MAD parity of +0.47%. A fall of the MAD which translates into a basket effect of +0.22% against a market effect of +0.25%, specified AGR.

Regarding liquidity conditions, the foreign exchange position of medium-sized banks also fell, from 3.4 billion dirhams (MMDH) to 2.2 MMDH in one week. However, "we are seeing a significant increase in import flows during this week, in connection with the resumption of activity," noted the AGR analysts, noting that the spread between the reference rate of the MAD and its central rate recedes further from its lower band and narrows by 24.2 basis points (PBS), going from -4.41% to -4.17%.

Furthermore, given the liquidity conditions of the Moroccan foreign exchange market and the still attractive levels of the MAD, the AGR analysts suggest that importers in dollars cover their operations in the coming weeks.