Moroccan Dirham Hits 20-Year Low Against Surging US Dollar

This prolonged surge in the USD/MAD pair is explained by a dual restrictive effect on the Moroccan currency, Basket/Market of +0.49% and +0.12% respectively, explains AGR in its recent note "Weekly Mad Insights - Currencies", noting that liquidity spreads show an increase of +12.4 bps to 3.63% at the end of this week, reflecting operators’ expectations of significant import flows in the short term.

As for the bank’s foreign exchange position, it is strengthening to over 5 billion dirhams (MMDH) on average per week, a one-year high according to the latest data published by Bank Al Maghrib (BAM), it is further specified.

Investors are closely watching the monetary policy decisions of the Fed and the ECB, fueling intense volatility in the foreign exchange markets, thus recommending that investors reduce their hedging horizons, observes AGR.