IMF Begins Talks with Morocco on New Precautionary Credit Line

During a press conference held at the end of the review of Morocco’s economic indicators, the official praised the resilience of the Moroccan economy, in a context of high inflation and global economic shocks, assuring that the discussions continue to see if it is possible to replace the PLL with a new financing line.

"We have started discussions with Morocco about the possibility of accessing a new precautionary line about 4 to 5 months ago. We have held several missions to finalize and conclude the discussions on this subject and also to see the possibility of replacing the PLL with a new financing line," he said.

Regarding the project to widen the dirham’s fluctuation band, the IMF believes that it is necessary to wait until all the conditions are met before continuing the exchange rate reform. This reform is salutary, but the transition to the next stage must be done at the right time, he advised.

Furthermore, the financial institution has praised the monetary policy adopted so far by Morocco. Aligning with the conclusions of Bank Al-Maghrib, the IMF indicated that the impact on growth of the 50 Bps rate hike in September is limited. According to Roberto Cardarelli, GDP growth should be around 1.25% in 2022 and the current account deficit should widen to around 4.25% of GDP.