Rabat, Morocco (TMT)- Morocco’s Minister of Economy Mohamed Benchaaboun said that the rationale behind drawing the IMF’s Precautionary Liquidity Line (PLL) of US$ 3 billion is to help better prepare for any unpredictability that may hit the Moroccan economy amid the coronavirus outbreak, which will help bear the brunt of any prospective economic upheavals, especially given that Morocco’s central bank expects the country to go through a recession in 2020.
Benchaaboune stressed that it was a wise decision to request the loan package quite early, referring to Morocco’s investment grade rating by the famous S&P credit rating agency, unveiled early April, as “a good rating, one that would allow drawing the funds in the current juncture with a good interest rate,” further noting that “Morocco is currently the only country in Africa with such an investment grade.”
“This has allowed us to draw the loan quite early, with a good interest rate,” Benchaaboun noted.
Given the current juncture, Morocco is witnessing a decline in exports, tourism activities, and remittances from Moroccans living abroad, while the country’s economic activity has been brought to a standstill.
The drawn loan will allow Morocco to maintain an adequate level of official reserves.
Morocco’s international reserves stood at 255.3 billion dirhams (25 billion dollars) and will be expanded by the 3 billion dollars loan drawn from the IMF, giving the country more breathing space.
To date, the big three credit rating agencies rate Morocco as follow:
|Moody’s Rating [+]||2019||Ba1|
|S&P Rating [+]||2019||BBB-|
|Fitch Rating [+]||2019||BBB-|
The Moroccan Times.