The USD/MAD parity was stable this week at 9.99, a 2-year high, according to Attijari Global Research (AGR). “Originally, a basket effect for the MAD of -0.18% offset by a liquidity effect of +0.15%”, explains AGR in its recent note “Weekly Mad Insight-Currencies”, relating to the week going from 02 to 06 May 2022.
The dollar depreciated slightly by 0.03% against the dirham over one week but remains at 2-year highs, continues the same source.
Liquidity conditions on the interbank foreign exchange market tightened this week with MAD liquidity spreads of -0.9% against -1.0% a week earlier, notes AGR, explaining this situation by higher import flows important at this time of year. The surge in international commodity prices also contributed to the rise in foreign currency imports and therefore to the appreciation of the dollar against the dirham.
As a net oil-importing country, the appreciation of international energy prices increases Morocco’s payments in foreign currencies. A situation which, according to AGR analysts, puts pressure on liquidity conditions and on the MAD at ST.
Faced with the volatility of currencies, AGR thus recommends flexible hedging strategies with very ST.
Forecasts
Given the EUR/USD forecasts and the liquidity conditions of the interbank foreign exchange market, AGR analysts have revised their USD/MAD forecasts for the next 3 months.
Thus, the MAD should appreciate against the USD over 1 month and depreciate over the next 2 months with greater import flows at this time of year, especially with the increase in the prices of imported products. The dirham should appreciate within 3 months. This period coincides with the receipt of travel and MRE receipts.
Recall that Morocco is preparing to host the 2nd operation «Marhaba 2», after a great success during the first edition. The target levels of the USD/MAD parity stand at 9.94; 10.01 and 9.91 over 1, 2 and 3 month horizons against a spot price of 9.99. On the other hand, the Dirham should depreciate against the Euro over the same horizons. The target levels of the EUR/MAD parity stand at 10.64; 10.71 and 10.60 over 1, 2 and 3 month horizons against a spot price of 10.56.