Morocco to repay part of $3 billion IMF credit facility

Morocco has pledged to repay part of a $3 billion International Monetary Fund credit facility in January, indicating a turn fortunes for the kingdom's economy amid the coronavirus pandemic.

The $936 million repurchase will take effect on January 8, more than two years before the end of a three-year grace period, Morocco's finance ministry said in a statement. The ministry said the move should “boost investors’ confidence”.

Morocco's foreign currency holdings are projected to remain largely unchanged at the equivalent of seven months' import needs, the ministry added.

The IMF said in a statement that post-programme monitoring might not be necessary following its latest Article IV consultation.

With tourism and exports hit by the coronavirus pandemic, Morocco has raised record amounts of foreign debt, including a $3 billionbond on the international market earlier this month. Morocco's foreign currency reserves stood at $30.5 billion prior to the Eurobond sale, according to a Bloomberg report on Thursday.

According to the IMF, remittances from Moroccan expatriates have played a significant role, alongside lower imports, in keeping foreign currency reserves at "an adequate level".

However the IMF also warned that Morocco faces “exceptional uncertainty”, with authorities needing to  continue supporting the economy until recovery is “well-entrenched”.

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