Morocco draws on IMF's PLL for $3 bln, central bank

Morocco on Tuesday drew on the Precautionary and Liquidity Line (PLL) for an amount of nearly USD 3 billion, repayable over 5 years with a grace period of 3 years, as part of the fight against the pandemic of the novel coronavirus (covid-19), Bank Al-Maghrib (BAM) announced Wednesday.

«The mobilisation of this facility comes within the framework of the PLL agreement concluded with the International Monetary Fund (IMF) in 2012 and renewed for the third time in December 2018, for a period of two years, with the intention of using it as insurance against extreme shocks, such as those we are currently experiencing», explained the same source.

The Covid-19 pandemic, on an unprecedented scale, points to a much deeper global economic recession than that of 2009, noted BAM, estimating that the national economy will consequently be impacted, especially at the level of sectors and outward-oriented activities, namely Morocco's global trades, travel receipts, remittances from Moroccans living abroad and foreign direct investment.

In such a context, drawing on the PLL will help mitigate the impact of this crisis on our economy and maintain our foreign exchange reserves at an adequate level capable of consolidating the confidence of foreign investors and our multilateral and bilateral partners in the Moroccan economy, noted the Central Bank.

The drawdown on this liquidity line will be made available to Bank Al-Maghrib and will be used mainly to finance the balance of payments and will not impact the public debt, which is a first in our financial transactions with the IMF, said the statement, adding that this new decision comes in addition to the measures taken by the Economic Monitoring Committee (CVE) and the efforts to mobilize external financing.