INTERNATIONAL HIGHLIGHTS
The liquidity spread of the Dirham, which represents the difference between the reference price of the MAD and its central price, is reduced by 21.8 BPS. This week, the spread stands at -4.23%, a low over the last six months, against -4.45% a week earlier.
Market operators forecast the continuation of the banks' deficit position on the foreign exchange market. This induces a restrictive effect of liquidity on the MAD. This is a significant market effect this week of over +0.23%. This effect was completely offset by an expansive basket effect for the MAD. It stands at -0.24% during the same period. In the end, and taking into account these developments, the Dirham remained almost stable this week against the Dollar at 9.26.
The latest Fed monetary tightening as well as expectations of higher US rates and stronger Dollar would likely have an impact on the Dirham in the MT.
Nevertheless, taking into account the liquidity conditions of the foreign exchange market and the high levels of volatility, we recommend hedging the export flows to ST in line with our scenario of appreciation of the Dirham over the next 3 months.
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