The Moroccan dirham strengthened against the U.S. dollar during the week of January 12–16, with the USD/MAD exchange rate stabilising at 9.22, marking a weekly decline of 0.18 percent, according to Attijari Global Research (AGR).
Analysts said the movement reflects improved conditions in Morocco’s interbank foreign exchange market, where foreign currency liquidity became more readily available. AGR attributed the positive effect primarily to a liquidity boost, estimated at -0.35 percent, which eased pressure on the dirham and supported smoother currency transactions.
The interbank market also showed signs of reduced stress, with spreads narrowing by 34 basis points to -3.1 percent, indicating lower transaction frictions. AGR said these factors combined to reduce demand pressure for U.S. dollars, helping the dirham maintain strength.
“Morocco’s interbank foreign exchange market is functioning more efficiently, with better availability of foreign currency and smoother trading conditions,” AGR said in its weekly report. “This has contributed to the dirham’s appreciation against the dollar.”
International monetary developments are also influencing the currency’s performance. In the Eurozone, the European Central Bank (ECB) appears to be nearing the end of its aggressive interest rate tightening cycle. With inflation stabilising and growth steady, the euro has become more stable, which benefits Morocco given its heavy trade links with Europe. A stable euro reduces exchange rate volatility and supports the dirham.
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In contrast, uncertainty in the United States, including domestic political tensions, has created volatility around Federal Reserve monetary policy decisions. AGR noted that this has raised the likelihood of short-term fluctuations in the U.S. dollar, which in turn can affect emerging market currencies such as the Moroccan dirham.
AGR recommended that market participants adopt a careful approach to risk management. Specifically, the research group advised traders to hedge foreign exchange positions over one- to three-month periods. Hedging allows investors to limit potential losses from unexpected swings in currency values while still participating in routine market activity.
“Given the global uncertainties and the potential for sudden shifts in U.S. monetary policy, strategic hedging is a prudent measure for market participants,” AGR said.
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The recent appreciation of the dirham also reflects Morocco’s relatively stable economic growth, which has helped contain interest rate pressures and limited volatility in currency markets linked to the euro. Analysts said the combination of domestic liquidity improvements and international monetary stability has created a favourable environment for the dirham.
Looking ahead, the dirham’s performance will likely remain sensitive to shifts in global interest rates, particularly those in the United States and Europe, as well as domestic liquidity conditions. AGR said continued monitoring of interbank FX market trends and international monetary developments will be crucial for traders and policymakers alike.
Overall, the recent movements highlight the interplay between domestic market liquidity, international monetary policy, and currency stability. Morocco’s authorities have maintained a careful approach to market management, ensuring adequate foreign currency supply and supporting orderly trading conditions.
The dirham’s appreciation against the dollar underscores the benefits of stable liquidity and efficient interbank operations, while also illustrating the influence of broader global financial trends on emerging market currencies.
