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Morocco's Financial Pulse: Dirham Dips, Reserves Surge Amid Market Shifts

Morocco's Financial Pulse: Dirham Dips, Reserves Surge Amid Market Shifts
Monday 06 January 2025 - 07:52 By: Dakir Madiha
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The Moroccan financial landscape showcased mixed signals in the final days of 2024 and early 2025, with the dirham experiencing a modest decline while foreign reserves demonstrated notable strength. The national currency recorded a 0.5% depreciation against the US dollar and a 0.6% decline against the euro between December 26 and 31, 2024.

Bank Al-Maghrib (BAM), Morocco's central bank, maintained a hands-off approach during this period, abstaining from foreign exchange auctions. Despite the currency's slight weakening, the country's official reserves painted a more optimistic picture, reaching MAD 375.2 billion ($37 billion) as of December 27, 2024. This represents a week-over-week increase of 0.6% and a significant year-over-year growth of 4.6%.

To maintain market stability, BAM implemented substantial daily liquidity injections averaging MAD 156.6 billion ($15.5 billion). This support was strategically distributed across various financial instruments: MAD 72.6 billion in short-term loans, MAD 49.6 billion in longer-term repurchase agreements, and MAD 34.4 billion in secured loans.

The interbank market remained stable, with daily trading volumes averaging MAD 5 billion and an interbank borrowing rate of 2.51%. However, the equity market showed mixed performance, with the Moroccan All Shares Index (MASI) declining by 1.1%, though still maintaining a robust year-to-date gain of 22.2%.

Sector-specific performance varied significantly, with real estate emerging as the standout performer, posting an 8.4% gain. The agro-industrial sector followed with a 2.9% increase, while construction and building materials rose by 1.3%. The banking sector showed modest growth at 0.5%, but telecommunications faced headwinds with a 3.2% decline.

Trading activity on the stock exchange experienced a significant slowdown, with total volume dropping from MAD 11 billion to MAD 7.3 billion. Block market transactions accounted for MAD 4.4 billion of this volume, while the central market contributed MAD 2.9 billion.

This financial snapshot reveals a complex picture of Morocco's economy, where currency pressures are offset by robust foreign reserves and selective sector growth, suggesting a period of strategic adaptation in the country's financial markets.

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