RABAT – Morocco's trade deficit rose 6.1 percent in January-August from a year earlier, the foreign exchange regulator said Monday, raising the chance the country might have to dip into an IMF facility amid dwindling foreign currency reserves. The rise in the trade shortfall, to 128.65 billion dirhams, although the rise was less marked than a 7.2 percent rise in the deficit in January-July. Tourism receipts fell 5 percent in the year to end-August, due to lower demand from the eurozone, the main source of foreign visitors, but the drop was also smaller than a 6.9 percent fall in January-July. Morocco's currency is not fully convertible, and growth in tourism and remittances helps mitigate any destabilizing impact on both the banking system and the current account balance from a net outflow of foreign exchange caused by the surge in the trade deficit. In August, the IMF granted Morocco a $6.2 billion line of credit for use in case economic conditions deteriorate and the country faces sudden financing needs. Despite the rise in the trade deficit, the central bank reported a rare rise last week in foreign currency holdings but it did not explain it or link it to the IMF granting the multi-billion dollar facility. Foreign currency reserves rose to 136 billion dirhams last week, a net 1 billion dirham rise from the previous week, according to central bank data showed, but even at that level they barely cover four months of import needs. Morocco's economic growth is expected to fall to around 3 percent this year from 4.9 percent in 2011 due to a drop in trade from the euro zone. It is also braced for higher imports as a lower domestic harvest and rising commodity prices mean it will have to import more agricultural products and at a higher price. The rising price of oil will also boost the value of its imports. The foreign exchange regulator released the data. – Reuters
