RIYADH: Morocco is expected to receive external credit support of $5 billion from the International Monetary Fund, thanks to its strong policy frameworks and track records of economic performance.
The North African country intends to treat the credit line as a precautionary measure to fight against any risks arising due to the highly uncertain global environment.
In an informal meeting of the Executive Board earlier this week, IMF Managing Director Kristalina Georgieva said she intends to recommend approval of the two-year flexible credit line arrangement for Morocco when they will meet again to take a decision in the following weeks.
IMF offers this credit line to help countries with very strong policy frameworks and track records of economic performance to safeguard against external shocks.
Morocco's ability to access external borrowing comes after it managed to exclude itself from the enhanced monitoring process, known as the ‘gray list’, of the Financial Action Task Force.
The FATF removed Morocco from the gray list during its general assembly last month, after assessing the compliance of the national system with international standards relating to the fight against money laundering and terrorist financing.
Back in 2012, Morocco obtained a preventions and liquidity line from the IMF at a value of $3 billion. It utilized the amount in 2020 to combat the repercussions of COVID-19.
Moreover, last week Morocco collected as much as $2.5 billion in international bonds. The International Credit Corp. affirmed that it is “ready to continue supporting Morocco in facing the risks of the global economic environment characterized by uncertainty”.
Morocco's 2023 budget allows the government to resort to internal borrowing of 69 billion Moroccan dirhams ($6.6 billion), an increase of 5.6 percent over 2022 figures, while the external borrowing ceiling jumped by more than 50 percent to 60 billion Moroccan dirhams.
According to data from the Ministry of Economy and Finance, Morocco's budget deficit decreased at the end of last year to reach 5.1 percent of gross domestic product, compared to 5.5 percent in 2021 as the deficit amounted to 69.5 billion Moroccan dirhams, down 1.1 percent from the year before.