Morocco: Translation Please - What Does This Gibberish Mean?

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A colleague dropped by my office yesterday and said, "This looks like something for you; it's just gibberish to me," handing me the latest review by the IMF Executive Board of Morocco's second PLL Arrangement and its final assessment of the first PLL. Yes, it certainly did sound incomprehensible to those of us uninitiated into the vocabulary of financial instruments related to government fiscal behavior (have I lost you yet?). So I decided that the good news story underneath the jargon needed to be translated so that more people are aware that Morocco continues to be headed in the right direction in its spending policies.

A PLL or Precautionary and Liquidity Line is a two-year arrangement whereby the IMF provides Morocco insurance against external risks, such as defaulting on government loans or excessive borrowing against its foreign currency reserves. Essentially, it meant that during the first PLL, Morocco could draw up to $5 billion to support its balance of payments, if needed. The PLL facility, as these instruments are called, introduced by the IMF in 2011, is designed to support countries that have the right budgetary policies but are experiencing difficulties due to external circumstances, such as natural disasters that devalue local agricultural or commodity production, excessive increases in imported energy costs, or other factors that upset their normal fiscal stability.

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