Attijari Global Research (AGR) forecasts a depreciation of the dirham against the dollar and the euro at the end of the first quarter of 2021, taking into account the first signs of depreciation of the MAD against the dollar during the week from December 21 to 24 .

The USD/MAD parity should thus increase by 1.8%, 2.2% and 2.4% at horizons 1, 2 and 3 months, to reach 9.14, 9.17 and 9.19 respectively, indicates AGR in its latest “MAD Insights” note.

For their part, the amplitudes of depreciation of the MAD would be less significant against the euro with a EUR/MAD parity which should rise by +0.4%, +0.7% and +0.9% on the same horizons.

“Taking into account the first signs of depreciation of the dirham against the dollar during this week, as well as the import flows in dollars expected over the coming months, we maintain the scenario of a depreciation of the dirham against the dollar and the euro at the end of Q1-21”, emphasizes AGR.

Faced with sustained demand for foreign currencies, the exchange position should, according to AGR analysts, cross downwards the thresholds reached over the past two weeks. “To this end, we expect more visible pressures on market liquidity,” they added.

Indeed, the USD/MAD reference price reached 8.99 at the end of the week against 8.89 a week earlier, thus signing the strongest weekly increase since September 2020, the same source said, noting that the foreign exchange position bank reached a low of the week at 7.2 billion dirhams (MMDH) before recovering to 8.3 billion dirhams at the end of the week.

"Under these conditions, the difference between the USD/MAD reference rate and its central rate narrowed to -2.87%, against -3.40% a week earlier", underlines the subsidiary of Attijarwafa Bank, dedicated to the research.

In the end, she continues, the market effect weighed on the depreciation of the MAD, which stood at 0.53% against a smaller basket effect of 0.27%.

“We maintain our recommendation to importers to hedge their future dollar positions. The USD/MAD parity should continue to show higher levels of volatility following a greater liquidity effect”, the analysts recommend, adding that the latter would be fueled by a catch-up effect of import flows during Q1-21.