Morocco draws on IMF credit line to support virus hit economy

• The five-year loan has a grace period of three years, the Moroccan central bank said.

RABAT: Morocco on Wednesday announced it has started to draw on a $3-billion credit line from the International Monetary Fund to offset a contraction of its economy because of the coronavirus pandemic.

The five-year loan has a grace period of three years, the Moroccan central bank said.

It said the credit line would help "soften the impact of the (coronavirus) crisis on our economy and maintain our exchange reserves at an adequate level".

The credit would be used "mainly to finance the balance of payments and will not impact public debt, in a first for our transactions with the IMF", the central bank said.

The Washington-based IMF, in a statement, said Rabat would "use funds purchased under the PLL (Precautionary and Liquidity Line) to cope with the social and economic impact of COVID-19 and to maintain strong external buffers in a context of heightened uncertainties".

Morocco has imposed a lockdown to combat the coronavirus, which has claimed 91 lives in the North African country from a declared total of more than 1,200 cases of COVID-19.

The state planning commission forecast Wednesday that Morocco's economy will contract 1.8 percent in the second quarter, in a context where further pressure is being exerted by a drought in the agriculture sector.

Apart from instructing people to self-isolate, like many countries around the world, Morocco has adopted economic and social measures to assist companies, workers and those dependent on social services.

State aid of between 800 and 1,200 dirhams ($80 to $120) is to be allocated for needy families to weather the crisis, from an emergency package also funded by corporate and private donations.