16 Dec Central Bank Governor Frustrated With Fitch Downgrade of Morocco
Rabat – Abdellatif Jouahri, the wali (governor) of Morocco’s central bank, Bank Al-Maghrib, is frustrated with Fitch Ratings’ downgrade of Morocco.
In October, the US credit rating agency downgraded Morocco’s default rating for long-term foreign currency bonds from BBB- to BB+. While Fitch said it considers Morocco’s outlook stable, the BB+ rating gave Morocco’s long-term foreign currency bonds a junk bond status.
The Fitch downgrade also cost Morocco it’s investment-grade rating. The loss of the investment-grade rating means Fitch considers that Morocco’s chances of defaulting on long-term foreign currency bonds have increased. Morocco’s dollar bonds spiralled, dropping 2.2 cents to reach a significant low of 121 cents on the dollar.
Fitch also forecast that Morocco is likely to widen its deficit from 4.1% of GDP to 7.9% amid the COVID-19 pandemic.
The diplomatic tensions come as anti-government protests broke out in Mogadishu, where demonstrators slammed President Mohamed Abdullahi Mohamed over delayed elections for both houses of parliament. The polls, which were due to be held early this month, have stalled on disagreements over the composition of the electoral board.