Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) will recommend to the IMF Board of Directors to grant Morocco a flexible line of credit of 5 billion dollars over two years, according to a press release from the Fund published on Monday.
“Given the strength of Morocco’s economic policy frameworks and balance sheet, IMF Managing Director Kristalina Georgieva intends to recommend approval of an arrangement under the Flexible Credit Line for the Morocco when the IMF board of directors meets again in the coming weeks to take a decision”, indicates the international financial institution.
“the IMF Executive Board met today in an informal session to consider a request from the Moroccan authorities for a two-year arrangement under the flexible line of credit (MCL) with the IMF, for an amount equivalent to 3.7 262 billion SDRs (about 417% of Morocco’s quota, or 5 billion dollars)”.
“This line of credit helps countries protect themselves against external shocks by adopting very solid economic policy frameworks and establishing a track record of good economic performance thanks to considerable and immediate access to IMF resources, without ex-post conditionality. ”, specifies the Fund, adding that the Moroccan authorities “intend to treat the line of credit as a precautionary device”.
“The IMF is ready to continue to help Morocco deal with the risks arising from a very uncertain global environment,” the statement concluded.
The Wali of Bank Al-Maghrib, Abdellatif Jouahri, announced that a flexible line of credit with the IMF is envisaged in March 2023. During the press briefing after the 4th and last quarterly meeting of BAM in 2022, Jouahri explained that this “financing mechanism is renowned for its flexibility and ensures that eligible countries have immediate access to a large amount of IMF resources without continued conditionality”.
Morocco’s eligibility for the LCM will largely depend on its exit from the gray list of the Financial Action Task Force (FATF), the Governor of the Central Bank further specified.
The Financial Action Task Force decided, unanimously among its members, to remove Morocco from the gray list, during the FATF General Assembly, held in Paris, from February 20 to 24, 2023.
