Morocco Draws on Funds Available under the Precautionary and Liquidity Line to Address COVID-19 Pandemic

IMF News, April 8, 2020

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Canonical URL: Morocco Draws on Funds Available under the Precautionary and Liquidity Line to Address COVID-19 Pandemic

Press Release No. 20/138
Date of press release: April 8, 2020
On April 7, the Moroccan authorities purchased all available resources under the Precautionary and Liquidity Line (PLL) arrangement.
Amount purchased: SDR 2.15 billion (about US$3 billion or 240 percent of quota and about 3 percent of GDP).

The authorities will use funds purchased under the PLL to:
- Cope with the social and economic impact of COVID-19.
- Maintain strong external buffers in a context of heightened uncertainties.
- Allow Morocco to maintain an adequate level of official reserves to mitigate pressures on the balance of payments.

Since 2012, Morocco has benefited from four successive PLL arrangements with the IMF.
The PLL instrument is precautionary and designed to meet the liquidity needs of member countries with sound economic fundamentals but with some remaining vulnerabilities.
The PLL provides rapid access to Fund resources in the event of external shocks or a worsening global environment.
This is the first time the authorities draw on funds available under the PLL, to cope with the unprecedented shock of the COVID-19 pandemic, including both its domestic impact and spillovers from a global recession.

Morocco is likely to experience a recession in 2020 due to:
- Sizable declines in exports, tourism and remittances.
- A temporary freeze in economic activity.
While the current account deficit will widen and capital inflows should decline in 2020, Morocco is expected to maintain an adequate level of official reserves following the PLL purchase.

The IMF remains closely engaged with the authorities to help them mitigate the impact of COVID-19 on Morocco’s economy.
The IMF will remain closely engaged with Morocco as the authorities address the impact of the pandemic.
Media relations contact listed: PRESS OFFICER: Wafa Amr; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson

Press Release No. 20/138 — International Monetary Fund, April 8, 2020.