Moroccan Dirham Holds Steady Against Euro, Dips Against US Dollar
The MASI Index Drops by 1.8%, Reflecting Market Volatility
The Moroccan dirham maintained its stability against the euro but experienced a 1.17% depreciation against the US dollar between September 26 and October 2. This fluctuation underscores the ongoing dynamics in the global currency market and their impact on Morocco's financial landscape.
According to a report by Bank Al-Maghrib (BAM), no foreign exchange auctions were conducted during this period. The stability of the dirham against the euro is a positive indicator, reflecting the resilience of Morocco's economic policies in the face of international currency fluctuations.
As of September 27, official reserve assets increased to MAD 367.5 billion ($35.7 billion), marking a 0.9% rise from the previous week and a 3.4% year-on-year growth. This increase in reserves is a testament to the country's robust financial management strategies.
BAM's average daily interventions in the money market amounted to MAD 154.3 billion ($15 billion). This included MAD 65.7 billion ($6.4 billion) in seven-day advances, MAD 51.9 billion ($5.1 billion) in longer-term operations through repurchase agreements, and MAD 36.7 billion ($3.6 billion) in guaranteed loans. These interventions are crucial for maintaining liquidity and stability in the financial market.
On the interbank market, daily exchange volumes averaged MAD 4.2 billion ($437 million), with an average interest rate of 2.75%. This activity highlights the ongoing transactions and liquidity within the interbank sector.
In the October 2 auction, BAM injected MAD 63.6 billion ($6.3 billion) through seven-day advances, further supporting the market's liquidity needs.
Meanwhile, the Moroccan All Shares Index (MASI), the primary benchmark of the Casablanca Stock Exchange, fell by 1.8%, bringing its year-to-date performance down to 16%. This decline was driven by significant drops in the agri-food sector (down 3.3%), banks (down 2.8%), and construction materials (down 1.8%). Despite these setbacks, the electricity and transport services sectors saw notable growth, rising by 4.5% and 8.6%, respectively.
The MASI serves as a key indicator of the Moroccan stock market's health, reflecting shifts in investor confidence and broader economic trends. The weekly trading volume rose to MAD 1.9 billion ($198 million), up from MAD 1.6 billion ($167 million) the previous week, with most transactions occurring on the central stock market.
Looking ahead to December 2023, the Moroccan dirham remained largely unchanged against the euro while appreciating by 1.52% against the US dollar during the period from December 14 to 20. This trend suggests a stabilizing effect in the currency market, which is crucial for economic planning and investment strategies.
The fluctuations in the Moroccan dirham and the MASI index highlight the need for continued vigilance and strategic management in the financial sector. As Morocco navigates the complexities of the global economy, its financial institutions and policymakers play a pivotal role in ensuring stability and growth.