Morocco signed its fourth agreement under the Precautionary and Liquidity Line since 2012.
By Zakaria Ouadghiri
Rabat – The Executive Board of the International Monetary Fund (IMF) approved Monday a two-year agreement for Morocco under the Precautionary and Liquidity Line (PLL) for an amount of $2.97 billion. This is the fourth PLL agreement since 2012.
According to the statement by Mitsuhiro Furusawa, IMF Deputy Managing Director and Acting Chair of the Board, Morocco has made considerable progress in reducing its domestic vulnerability in recent years.
“Growth has been robust in 2018 and is expected to accelerate gradually over the medium term, assuming we see an improvement in external conditions and sustained progress in implementing reforms,” Furusawa added.
Introduced in 2011, the PLL responds to the liquidity needs of member countries that have a strong record of economic policy execution, but remain vulnerable in some respects.
The PLL builds on the Precautionary Credit Line, designed to meet the needs of countries that have some remaining vulnerabilities that preclude them from using the Flexible Credit Line (FCL). The FCL was designed for crisis-prevention and crisis-mitigation lending for countries with very strong policy frameworks and track records in economic performance.
To date, only two countries, Former Yugoslav Republic of Macedonia and Morocco, have used the PLL.
The IMF approved the third PLL, worth $3.42 billion, in July 2016, which expired last July. Morocco signed the first agreement in August 2012, for an amount of $6.21 billion, while the balance of payments and foreign exchange reserves were under significant pressure at the time. July 2014 saw the approval of the second 24-month agreement for $5 billion.