Morocco, IMF negotiate new liquidity line

Morocco and the IMF are in the early stages of negotiating a flexible liquidity line as a precaution against external shocks, including imported inflation.

The news was unveiled by central bank governor Abdellatif Jouahri earlier this week and confirmed later by IMF representative to Morocco Roberto Cardarelli, who said Morocco was seeking a flexible credit line.

Cardarelli recalled, at an event in Rabat by the IMF Economic Review, that Morocco has benefited from a $3 billion-Precautionary Liquidity Line but still had to reimburse 2 billion dollars.

He said for now Morocco is in a comfortable macro-financial position with foreign exchange reserves covering 6 months of imports.

But, he said, negotiations for a new credit line are in their early stages as Morocco has to satisfy a set of criteria as the FCL requires a “solid macro-financial framework” although it is “unconditional.”

For Morocco, having access to this new IMF financing will put the country in a better position as it seeks to tap the international bond market.

Jouahri said Morocco may raise a bond worth 1 billion dollars, despite the difficult conditions in the market.

Speaking at the IMF economic review event, Jihad Azour IMF MENA region chief, said Morocco took ahead large-scale reforms that helped the country improve its economic outlook.