Bank Al-Maghrib & IMF Extend Investment Agreement

Morocco’s central bank (Bank Al-Maghrib ) has agreed to extend its investment agreement for the benefit of the Poverty Reduction and Growth Trust (PRGT) until 2022 in support of IMF’s concessional lending to low-income member countries.

The International Monetary Fund (IMF), as Trustee of PRGT, has amended its 2012 investment agreement with Bank Al-Maghrib, through which Morocco committed to provide a subsidy contribution of SDR 1.1 million to the PRGT. To achieve this goal, the investment agreement with Morocco was extended on October 13 by up to five years.

This amendment, effective starting October 13, 2017, constitutes the first PRGT investment agreement that takes int account the new investment strategy for PRGT assets approved by the IMF Board in March this year.

Morocco’s contribution to the PRGT is important for sustaining the Fund’s concessional lending to the IMF’s low-income member countries over the medium-term.

In the latest review of the Moroccan economy, the IMF said Morocco has strengthened in recent years the resilience of its economy thanks to better fiscal management and diversification of its economic activities.

The Moroccan economy has benefited from the continuation of prudent macroeconomic policies and structural reforms as well as favorable developments in oil prices, said the Fund experts.

They also hailed the significant structural reforms launched in the North African country and deem it is necessary to accelerate their implementation in order to increase productivity gains and job creation, and to raise growth potential.

According to IMF outlook, economic growth in Morocco is expected to accelerate to about 4.4 percent in 2017 as agriculture recovers and performance in the nonagricultural sector strengthens.

The IMF team welcomes the recent public pension reform as well as improvements in public finances and the efforts aimed at increasing access to finance, in particular for small- and medium-sized enterprises.

“We support the government’s intention to begin a gradual transition towards a more flexible exchange rate regime and inflation targeting. This regime will facilitate integration in the global economy by preserving competitiveness and reinforcing the capacity to absorb external shocks”, said the IMF.