The IMF has approved financing of about $2.97 billion in the form of a Precautionary and Liquidity Line (PLL) to help Morocco ward off external economic shocks.

“The new PLL arrangement will provide insurance against external shocks and support the authorities’ efforts to further strengthen the economy’s resilience and promote higher and more inclusive growth,” the IMF Executive Board announced on Monday.

The two-year arrangement will help lower the ratio of public debt to GDP over the medium term while securing priority investment and social spending, the IMF said on its website.

Morocco’s treasury debt-to-GDP ratio for 2019 is expected to rise to 67.1% in 2019, up from 66.7% in 2018 and 65.1% in 2017, according to Finance Ministry data.

The ratio of public debt to GDP stood at 91.2% in 2017, with the government planning to reduce it to 60% in 2021.

In 2016, the IMF granted Morocco a two-year $3.5 billion credit line to give foreign lenders, investors and rating agencies reassurance about Morocco’s economic policies, allowing it to tap international capital markets on more favourable terms.

The external shocks that the PLL is intended to guard against could include a spike in oil prices, the central bank has said.