The Dirham is expected to depreciate slightly by the end of 2020, due to a catch-up effect in import flows, according to Attijari Global Research (AGR). The EUR/MAD parity should thus increase by 0.3%, 0.6% and 1.1% respectively within 1 month, 2 months and 3 months, explains AGR in the 1st edition of its new generic report “MAD Insights”, a weekly analysis of the Dirham as well as its evolution prospects. Based on its estimates, AGR indicates that the Dirham should return to the levels recorded in June 2020, i.e. a EUR/MAD parity close to 10.9, reports MAP

The levels of depreciation of the MAD would be higher against the dollar, notes AGR, adding that the USD/MAD parity should rise by 0.5%, 0.8% and 1.3% respectively within 1 month, 2 months and 3 months. “Indeed, we have noted a slight recovery in import operations in Morocco following the appreciation of the Dirham during Q3-20,” said AGR, noting that under these conditions, the average USD/MAD parity should be around 9.26, within 3 months, without reaching the levels observed in June 2020, i.e. 9.8. In addition, the document highlights that the average volatility levels of the MAD over 1 month, 2 months and 3 months, against the six main currencies have reached “interesting levels”.

Therefore, AGR advises “Corporates to favour optional strategies for hedging the Dirham against its main reference currencies”. In addition, AGR notes that the MAD reference price has continued to move below its central rate since June 2020, noting that the spread between these two prices is in negative territory, revealing a slight appreciation of the Dirham against the dollar. This gap has thus increased from - 2.85% to -2.87%, i.e. a market effect of -0.02% in one week. Combined with a negative basket effect of 0.12%, the USD/MAD parity thus fell to 0.14% over