With the Flexible Credit Line (FCL), Morocco settles in a Rolls Royce in the midst of unforeseen events and global financial turbulence. The metaphor, drawn from the colorful language of Mrs Fouzia Zaaboul, Director of Treasury and External Finance, provides information on the importance of the step that Rabat is preparing to take by asking the International Monetary Fund (IMF) for this financial facility.
If the process materializes, the Flexible Credit Line is worth 5 billion US dollars, or nearly 50 billion Dirhams. But beware, for the time being, nothing is yet in the pocket, because the suspense continues while waiting for other stages. At the end of the informal meeting on Monday, March 06, Kristalina Georgiva, Managing Director of the IMF, recommended the approval of this facility to the Fund’s next board meeting on March 26. It is during this official meeting that the fate of the FCL will be decided. In the meantime, the management of the IMF is favorable to the idea of such a line in favor of Morocco.
As a reminder, this IMF facility constitutes insurance which, like the Precautionary and Liquidity Line (PLL), allows beneficiary member countries to cope, when necessary, with exogenous shocks. The idea is to help countries preserve their macroeconomic stability, especially since Morocco has already benefited from the PLL between 2012 and 2020. This time, Rabat has officially asked the IMF to examine the possibility of benefit from the FCL. This facility is more advantageous and reserved for a limited number of countries, having more solid economic fundamentals in comparison with the PLL, notes an official at the Ministry of Economy and Finance.
Morocco’s recourse to this facility falls within the framework of the Government’s anticipatory approach aimed at protecting itself against external shocks and contributing to ensuring the conditions conducive to the continued implementation of the reform agenda. It is also a question of reinforcing the achievements in terms of consolidating the economic fundamentals. Indeed, and despite the resilience it has shown, the Moroccan economy is not immune to external shocks linked, in particular to the surge in the prices of energy and food products, the economic recession in the Euro zone, and the tightening of international financial conditions.
This agreement will support Rabat’s economic strategy, by strengthening the confidence of partners and investors. It will contribute to macroeconomic stability, in particular by ensuring the availability of financial resources in the event of severe blows that would put pressure on the balance of payments.
Mohamed CHAOUI
