- The International Monetary Fund (IMF) has approved a $4.5 billion Flexible Credit Line (FCL) for Morocco to strengthen its foreign exchange reserves and support economic reforms.

- The IMF highlighted Morocco's economic resilience but warned of risks from external shocks and persistent droughts affecting agriculture.

- This is Morocco’s second FCL after receiving $5 billion in April 2023, alongside previous precautionary and liquidity lines from 2012 to 2020.

The International Monetary Fund (IMF) announced on April 2 that it has approved a $4.5 billion Flexible Credit Line (FCL) for Morocco, to be disbursed over two years. The move aims to boost the country’s foreign exchange reserves and accelerate structural reforms.

"In a highly uncertain environment, the arrangement will enhance Morocco’s external buffers and provide insurance against downside risks. The authorities intend to treat the new arrangement as precautionary," the IMF stated.

Despite Morocco’s strong track record in implementing reforms, the IMF warned that the country remains exposed to external uncertainties, including global economic fluctuations, rising commodity prices, and climate-related challenges. Morocco is particularly vulnerable to severe droughts, which continue to threaten its agriculture sector, a key pillar of the economy, the institution added.

Kenji Okamura, the IMF’s Deputy Managing Director and Acting Chair, praised Morocco's economic stability, emphasizing that the credit line would play a crucial role in supporting the country’s reform agenda.

The FCL is designed for countries with strong economic policies and a solid track record in crisis prevention. Eligibility criteria include a stable external position, low and stable inflation, a sound financial system, and transparency in economic data.

Morocco previously secured a $5 billion FCL in April 2023. Between 2012 and 2020, it also benefited from four Precautionary and Liquidity Lines (PLL), another IMF tool designed to support countries facing balance-of-payment risks while maintaining sound economic policies.