Morocco's Currency Market: Dirham Shows Mixed Performance as Foreign Reserves Grow

Saturday 28 December 2024 - 14:00

By: Dakir Madiha

Morocco's Currency Market: Dirham Shows Mixed Performance as Foreign Reserves Grow

The Moroccan Dirham demonstrated varied performance in foreign exchange markets during the week of December 19-24, recording a 0.7% depreciation against the US dollar while strengthening by 0.29% against the euro, according to the latest Bank Al-Maghrib (BAM) report.

The nation's financial position remained robust, with official reserve assets reaching MAD 373.1 billion (approximately USD 37.3 billion). This represents a 0.9% increase from the previous week and a notable 4% growth compared to the same period last year.

BAM maintained significant market presence with daily interventions averaging MAD 147.5 billion. These operations comprised MAD 63.5 billion in 7-day advances, MAD 49.6 billion in longer-term repos, and MAD 34.4 billion in guaranteed loans. The interbank market remained stable, with daily transaction volumes averaging MAD 1.6 billion and the interbank rate holding steady at 2.5%.

In a notable development on December 25, BAM provided additional liquidity support of MAD 72.6 billion through 7-day advances, effective December 26.

The Moroccan stock market experienced downward pressure during this period, with the MASI index declining by 1.1%, though maintaining a strong year-to-date performance of 20.8%. The decline was primarily driven by weakness in key sectors:
- Banking sector: -0.9%
- Building materials and construction: -1.9%
- Real estate: -3.6%

However, some sectors showed resilience, with retail and insurance stocks posting gains of 0.8% and 3.2%, respectively.

Market activity intensified significantly, with weekly trading volume surging from MAD 7.8 billion to nearly MAD 11 billion. A notable transaction involved the trading of 353,551 shares of Compagnie de Transports au Maroc (CTM) at MAD 800 per share, contributing substantially to block market activity.

This comprehensive market movement reflects the dynamic nature of Morocco's financial landscape, characterized by currency fluctuations, steady central bank intervention, and active stock market participation.