The Moroccan government removed the limit on foreign debt on Monday in order to meet its financing needs amid a rise in expenditures and a drop in foreign exchange reserves.
Using the IMF liquidity line still needs to be approved by the cabinet and the IMF and would help Morocco maintain its foreign reserves, according to analysts.
Morocco will also tap the bond market benefiting from S§P investment grade and Moody’s Ba1 stable outlook.
The economy of the North African country braces for tough times as coronavirus confinement affected most economy sectors, key to attracting foreign exchange reserves.
Morocco has also increased spending on social protection and gave enterprises economic lifelines including access to easy loans and tax deferrals.
On the short-term, Morocco is equipped to mitigate coronavirus impact, according to the Finance minister Mohamed Benchaaboun who was speaking to L’Economiste daily.
Banks, agriculture, extractive industries and public administrations, representing 53% of non-agricultural GDP, maintain normal operations and are unlikely to be affected by the coronavirus crisis, said minister Mohamed Benchaaboun.
“Morocco has foreign exchange reserves covering 5 months of imports of goods and services,” he said, adding that the country enjoys the trust of its creditors, whether at the bilateral or multilateral levels.
Morocco put the safety of its citizens before all else and took pre-emptive measures against the coronavirus outbreak combined with measures to maintain jobs, he said.
Some 850,000 people affiliated with the pension fund CNSS have already applied to benefit from monthly compensations after they stopped working due to coronavirus confinement.
Informal sector workers have started receiving compensations for work stoppage on Monday. More are expected to be registered for the compensations targeting the informal sector.