The Executive Board of the International Monetary Fund (IMF) on Monday (April 3) approved a two-year arrangement for Morocco under the Flexible Line of Credit (FCL) for an amount equivalent to SDR 3.7262 billion ( approximately $5 billion, equivalent to 417% of the quota).
Since 2012, Morocco has benefited from four successive Precautionary and Liquidity Line (PLL) agreements, amounting to around $3 billion each, the IMF recalls, noting that the first PLL was approved on August 3. 2012 and three others on July 28, 2014, July 22, 2016 and December 17, 2018.
The fourth PLL expired on April 7, 2020, when the authorities purchased all available resources under the LPL to limit the social and economic impact of the COVID-19 pandemic and allow Morocco to maintain an adequate level of official reserves for alleviate pressures on the balance of payments.
“While the LPL agreements have served the country well in the past, Morocco’s very strong institutional policy fundamentals and frameworks, its sustained track record of implementing very strong policies, and its continued commitment to maintaining these policies in the future all justify the transition to an FCL agreement”, notes the IMF.
“An FCL agreement would help the country meet the challenge of rebuilding political space, while accelerating the implementation of its structural reform program in an increasingly risky external environment,” he further notes.
According to Antoinette Sayeh, Deputy Managing Director and Acting President, “Morocco’s very solid macroeconomic policies and institutional framework have enabled its economy to remain resilient to the multiple negative shocks that have occurred over the past three years, including the pandemic. , two droughts and the fallout from the Russian war in Ukraine”.
Going forward, she said, “the Moroccan authorities remain determined to rebuild buffers, to provide a comprehensive policy response to new shocks and to pursue the implementation of the comprehensive structural reforms needed to make growth stronger, more resilient and more inclusive economy”.
And the official underlined that “despite this resilience, the Moroccan economy remains vulnerable to a worsening of the global economic and financial environment, to increased volatility in commodity prices and to recurrent droughts. In this context, the FCL arrangement will strengthen Morocco’s external buffers and provide the country with additional insurance against extreme risks”.
“The authorities intend to treat the FCL arrangement as a precautionary arrangement and exit the arrangement as soon as the 24-month period is over, depending on the evolution of the risks,” she said. still indicated.