Morocco’s Bank Al-Maghrib (BAM) announced this week it received a $1.2 billion boost in liquid reserves through the IMF’s issuance of Special Drawing Rights (SDRs). The SDR is a form of international asset the IMF created in 1969. The assets were used as part of the Bretton Woods agreement, which ensured a steady standard of monetary policy between countries.
This means BAM now has access to more liquid funds after the International Monetary Fund’s (IMF) latest decision. The current Reserve levels in the country have shot to the highest since January.
According to the IMF, SDRs are still in use today especially during “global financial crisis.” The capital is usually issued to countries when IMF member states require an emergency supply of liquid capital. Morocco’s central bank reported earlier this year that citizens were draining the country’s financial institutions of cash as a result of the pandemic.
The cash frenzy led to the increase of currency circulation in Morocco to 319 billion MAD, or roughly $35 billion. With the sudden increase in money circulation, banks risked a shortage in institutional funds to ensure their continued operations. With the latest liquid capital boost, BAM reported the country’s Official Reserve Assets (AOR) jumped by nearly 3.9% compared to last week.
The governor of BAM, Abdellatif Jouahri said the reserves will help BAM “strengthen its reserves, arbitrate them against currencies, or use them to finance its expenses.”
With an increased revenue holding, Bank al-Maghrib can continue to fund Morocco’s economic rebound from COVID-19 and continue to support the country’s many economic initiatives working towards leading the Moroccan people out of the largest global economic recession seen in decades.