The International Monetary Fund said Tuesday said that it has approved a two-year $5 billion flexible credit line for Morocco and the arrangement is set to enhance the country’s external buffers and provide insurance against plausible tail risks temporarily.
The Washington-based lender said Morocco qualifies for the flexible credit line due to its very strong policies, institutional policy frameworks, economic fundamentals and its commitment to maintaining such policies in the future.
Morocco has benefited from four successive precautionary and liquidity line arrangements amounting to about $3 billion since 2012.
The IMF said the country’s “very strong fundamentals and institutional policy frameworks, sustained track records of implementing very strong policies and continued commitment to maintaining such policies in the future” justify the transition to a flexible credit line.
“Morocco’s very strong macroeconomic policies and institutional framework have allowed 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 spillovers from Russia’s war in Ukraine,” said Antoinette Sayeh, IMF Deputy Managing Director and Acting Chair.
“Despite this resilience, the Moroccan economy remains vulnerable to a worsening of the global economic and financial environment, higher commodity price volatility, and recurrent droughts,” against which the facility provides some protection, she said.
Meanwhile, the government in Rabat stated their intention to treat the arrangement as precautionary.
