Rabat – The International Monetary Fund (IMF) approved on Wednesday a two-year $4.5 billion arrangement for Morocco designed for crisis prevention.
The arrangement is under the Flexible Credit Line (FCL), the statement said on Wednesday, noting that Morocco has canceled the previous FCL arrangement.
“The Moroccan authorities stated their intention to treat the new arrangement as precautionary,” the IMF said, noting that this constitutes the second FCL with lower access in line with the authorities’ goal of contributing to reducing access as risks permit in the context of their gradual exit strategy.
Kenji Okamura, Deputy Managing Director and Acting Chair of the IMF, spoke of the new approved credit line, applauding the Moroccan economy’s resilience to different shocks, particularly drought that affected agricultural production.
“Morocco’s very strong institutional and policy frameworks have been effective in addressing these shocks, with well-calibrated fiscal, monetary, and financial policies,” Okamura said, stressing that Morocco’s government is committed to continuing to implement its ambitious structural reform agenda towards a more resilient and private sector-led growth.
Commenting on the new FCL arrangement, Okamura said the arrangement will continue to provide Morocco insurance against downside risks, acknowledging that the economy remains vulnerable to a worsening of global economic and financial conditions, higher commodity prices, and new occurrences of droughts.
“The authorities are committed to treating the new FCL arrangement as precautionary and gradually reducing access, in the context of their strategy contingent on the evolution of risks,” Okamura concluded.
In March, the IMF’s executive board also approved a $496 million loan for Morocco under the Resilience and Sustainability Facility arrangement, bringing the total disbursement under this arrangement to about $1.24 billion.
