Public deficit: IMF Fully Agrees with BAM's Policy

The International Monetary Fund fully agrees with the policy of Bank Al Maghrib (central bank) which refuses any intervention to finance the public deficit, said on Monday evening the head of the mission of the International Monetary Fund (IMF), in charge of Morocco, Roberto Cardarelli.

“The IMF is in favor of the accommodating monetary policy led by Bank Al Maghrib and considers that it should be continued,” said Carderelli during a press conference devoted to the presentation of the conclusions of his consultations with the Moroccan authorities, under Article IV of the IMF, noting that domestic public debt is sustainable as long as the growth projections adopted for next year are achieved.

According to the IMF, Bank Al-Maghrib (BAM) has taken decisive action to mitigate the impact of the pandemic on financial sectors as well as on the real economy.

“We are convinced that the central bank will use all the tools at its disposal to help limit the economic impact of the pandemic,” Cardarelli said.

In addition, Cardarelli indicated that Moroccan banks have been relatively resilient in the face of the pandemic, thanks in particular to their relatively high initial levels of capital and liquidity, welcoming BAM’s decision to increase their estimates and suspend the dividend distribution this year.

“We note with satisfaction that the central bank continues to actively monitor the repercussions of the crisis on the quality of bank assets,” he added.