The International Monetary Fund (IMF) approved a new two-year, $4.5 billion Flexible Credit Line (FCL) arrangement for Morocco on Wednesday, April 2. The arrangement, designed for crisis prevention, was granted due to Morocco's strong institutional policy frameworks and economic fundamentals, according to an IMF press release. Morocco qualifies for the FCL based on its track record of implementing strong policies and its continued commitment to maintaining them in the future, IMF said. The arrangement will strengthen Morocco's external buffers and provide insurance against downside risks. However, Moroccan authorities intend to treat the new arrangement as precautionary. Kenji Okamura, IMF Deputy Managing Director and Acting Chair, acknowledged Morocco's strong policy track record and resilience to recent shocks, despite successive droughts that have severely impacted agricultural production and pushed unemployment to historic highs. «The new FCL arrangement will also continue to provide Morocco with insurance against downside risks. The Moroccan economy remains vulnerable to a worsening of global economic and financial conditions, higher commodity prices, and new occurrences of droughts», he added. This marks Morocco's second FCL, with lower access in line with the authorities' strategy of gradually reducing reliance on such arrangements as risks permit. The first FCL, approved on April 3, 2023, amounted to SDR 3.7262 billion. Before that, Morocco benefited from four successive Precautionary and Liquidity Line (PLL) arrangements between 2012 and 2020.
