Morocco borrows $3bn from IMF to combat COVID-19

The Central Bank of Morocco announced on Wednesday that it had secured a $3 billion loan from the International Monetary Fund (IMF) with the aim of countering the effects of COVID-19 on the national economy.

The Central Bank of Morocco indicated in a statement that: “The loan comes within the framework of the country’s proactive policy to contain the coronavirus crisis…. Accordingly, the Precautionary and Liquidity Line (PLL) (a preventive financial loan against external risks and shocks) was used to endorse the government’s endeavour in this regard.”

The loan obtained by Rabat is repayable over a period of five years, with a grace period of three years. Yet, official sources did not specify the details of the loan’s interest rate.

The Central Bank of Morocco stated that: “The unprecedented scale of this pandemic foreshadows a global economic contraction far more intense than the 2009 recession, which will negatively affect the national economy, especially at the level of service sectors and activities directed abroad, in addition to tourism revenues.”

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According to the statement, the loan will help alleviate the effects of the crisis on the economy, and keep foreign exchange reserves at comfortable levels, which will help the state maintain the confidence of foreign investors and bilateral partners.

Earlier on Wednesday, the High Commission for Planning (HCP) in Morocco expected the growth of the local economy in the second quarter of 2020 to contract by 1.8 per cent per year, due to the COVID-19 pandemic.

On 19 March, the authorities declared a state of health emergency and restricted movement in the country until 20 April, as part of measures to control the spread of the virus.