S&P Global Ratings Affirms Morocco’s ’BBB-’ Investment Grade Credit Rating

According to S&P Global Ratings analysts, this confirmation of Morocco’s rating is supported in particular by the transition to a new stage in the gradual liberalization of the exchange rate regime, which should contribute to improving the country’s external position, competitiveness and resilience to external shocks.

For the American rating agency, the Precautionary and Liquidity Line (PLL) with the IMF supports the country’s macro-financial stability and its economic and fiscal policy objectives.

Regarding the economic and budgetary impact of the covid-19 pandemic, it will be contained without the credit parameters suffering structural damage. Once the impact of covid-19 is under control, the agency recommends the continued implementation of reforms. This should lead to an improvement in economic and budgetary performance and a reduction in the current account deficit.

Aware of the negative impact of the pandemic on the country’s budgetary situation, the agency nevertheless welcomed the measures implemented by the kingdom to mitigate this impact, in particular wage subsidies, the deferral of bank maturities, the suspension of social security contributions as well as the postponement of tax returns.

Furthermore, the agency supported the measures taken by Bank Al-Maghrib to address liquidity-related risks, in particular the lowering of the key rate.

As for S&P Global Ratings analysts, Morocco’s rating is also supported by the moderate level of debt burden, manageable deficit levels and political and social stability. This, thanks in particular to the implementation of several measures aimed, among other things, at reducing unemployment and disparities. It also recalled that the rating remains supported by the use of innovative financing for public investment and the continuation of tax reform.