Moroccan Dirham Strengthens Against Dollar, Crosses Key Threshold

In its weekly note "MAD Insights - Currencies", AGR specifies that the reference rate of the USD/MAD parity was this week at 8.97 after having crossed the 9.0 threshold upwards last week. This development is explained by a basket effect of -0.68% reflecting the depreciation of the dollar against the euro. In a context where the foreign exchange position oscillates around 5.5 billion dirhams (MMDH), the market effect is less important with an impact of +0.27% on the parity, note the AGR analysts.

In the end, the spread between the reference rate and the central rate of the MAD has eased by 26.3 basis points (PBS) to -3.34%, the experts point out. Taking into account the high volatility of the dirham and the evolution of liquidity spreads in the foreign exchange market, they recommend that importers hedge their foreign exchange transactions over 3-month horizons.

Despite this slight appreciation of the dirham against the dollar, the analysts of the Attijariwafa Bank subsidiary dedicated to research maintain their scenario of depreciation of the MAD at horizons 1, 2 and 3 months unchanged. They anticipate a significant catch-up of import flows over the forecast horizon. The MAD should depreciate against the dollar and the euro at horizons 1, 2 and 3 months compared to current rates, they predict.

They also estimate that the USD/MAD parity would thus be at 9.01, 9.04 and 9.05 at horizons 1, 2 and 3 months, compared to 8.97 currently. Consequently, the MAD would depreciate against the dollar by 0.5%, 0.8% and 1% at horizons 1, 2 and 3 months. Similarly, the dirham should depreciate against the euro during the same periods, at similar levels. The EUR/MAD parity would be at 10.90, 10.93 and 10.96 against a current rate of 10.85. The depreciation levels would thus reach 0.4%, 0.8% and 1.0% at horizons 1, 2 and 3 months, they conclude.