Rabat – In the wake of the end of the summer, Bank Al-Maghrib (BAM), Morocco’s central bank, announces the organization of currency auctions beginning tomorrow, Monday, September 20.
This means BAM will be buying currencies from the banks instead of ceding surpluses to them, as is customary. Bank Al-Maghrib announced in a press release that, starting on Monday, September 20, it will run auctions for the purchase of currencies “in order to absorb current surpluses and ensure the proper functioning of this market.
Based on the developments on the foreign exchange market, BAM will conduct these auctions as often as necessary.
After the closing of borders during the COVID lockdown, Moroccan banks suffered a shortage of foreign currency at the end of the summer, primarily through contributions from Moroccans living abroad (MRE), following the opening of borders. Remittances to Morocco from MRE have also shown a large increase in recent months.
At the end of July 2021, direct transfers reached MAD 54.02 billion ($6 billion), a 45.6% increase in comparison to 37.1 billion at the end of July 2020. The additional amount of more than MAD 16 billion is approximately 16.4% of transfers.
As a result, the bank’s foreign exchange position, which is its positive or negative balance in a currency, has improved considerably. The bank’s foreign exchange position “remains at its highest level in over ten billion dirhams,” according to an analysis published by Attijari Global Research (AGR).
By the end of July, the same exchange position was still less than MAD 2 billion. After continuing to rise during the month of August, it will end the month above the MAD 9 billion mark.
According to the latest statistics from BAM, Morocco’s central bank will acquire the surplus of currencies and increase its own foreign exchange reserves, which are at a very comfortable level of MAD 313 billion.
At the end of August, the reserves were also greatly bolstered by the payment by the International Monetary Fund of an allocation of $1.2 billion under the Special Drawing Rights (SDR) initiative.
