Moroccan Government Uncaps External Loans

People wear protective masks following the outbreak of the coronavirus (file photo: Reuters)
People wear protective masks following the outbreak of the coronavirus (file photo: Reuters)
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Moroccan Government Uncaps External Loans

People wear protective masks following the outbreak of the coronavirus (file photo: Reuters)
People wear protective masks following the outbreak of the coronavirus (file photo: Reuters)

Morocco’s government council decided to uncap the country’s external loans, currently limited at around $3.1 billion, as announced in the 2020 budget and approved by the parliament last December.

This could help Morocco better respond to the COVID-19 crisis and mitigate its impact on the most affected economic sectors, such as tourism and transportation.

The government also hopes this will help in managing the consequences of the scarcity of rains during the winter season which has negatively impacted agriculture in many areas in the country.

The Moroccan economy is facing a difficult situation due to the lack of currency inflow resulting from tourism, remittances, and foreign investment. In addition, many exports sectors were halted such as auto industry, textile and clothing industry, and agricultural products.

The cabinet issued a statement saying it authorized uncapping of external loans to ensure the influx of hard currency into the country, especially through international loans, given that many sectors were affected by recent developments, such as tourism, foreign direct investment, and exports.

Minister of Economy Mohamed Benchaaboun suggested a number of measures relating to the review of the 2020 budget in light of the emerging conditions of the coronavirus and drought.

Benchaaboun proposed redefining priorities at the level of future expenditures for the government and public institutions. He emphasized the need to accelerate contracting dues, especially those of very small, small, and medium enterprises to enable them to fulfill their financial obligations and maintain jobs.

The Minister hoped those measures would help alleviate the social repercussions of this crisis.

Benchaaboun pointed out that these reviews are imposed by the global and national economic context affected by the negative repercussions of the coronavirus pandemic.

The developments require urgent and fast measures to limit the effects of this pandemic, especially by directing public spending towards priorities at the health, social, and economic levels, according to the Minister.



Oil Retreats on US Tariff Uncertainty and OPEC+ Supplies

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
TT
20

Oil Retreats on US Tariff Uncertainty and OPEC+ Supplies

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices slipped on Thursday as the possibility of US tariffs being reinstated raised demand concerns ahead of an expected supply boost by major producers.

Brent crude futures fell 58 cents, or 0.8%, to $68.53 a barrel by 0942 GMT. US West Texas Intermediate crude declined 57 cents, or 0.9%, to $66.88.

Both contracts had hit one-week highs on Wednesday as Iran suspended cooperation with the UN nuclear watchdog, raising concerns the lingering dispute over its nuclear program could again devolve into armed conflict.

A preliminary trade deal between the US and Vietnam also boosted prices.

Tariff uncertainty looms large, however. The 90-day pause on the implementation of higher US tariffs ends on July 9, with several large trading partners yet to wrap up trade deals, including the European Union and Japan.

The OPEC+ group of oil producers, meanwhile, is expected to agree to raise output by 411,000 barrels per day (bpd) at its policy meeting this weekend. Adding to negative sentiment, a private-sector survey showed that service activity in China - the world's biggest oil importer - expanded at its slowest pace in nine months in June as demand weakened and new export orders declined. A surprise build in US crude inventories also highlighted demand concerns in the world's biggest crude consumer.

The US Energy Information Administration said on Wednesday that domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels.

The market will be watching for the US monthly employment report on Thursday, which is likely to shape expectations over the depth and timing of interest rate cuts by the Federal Reserve in the second half of the year, analysts said.

Lower interest rates could spur economic activity that would boost oil demand.