Mr. Zouhair CHORFI, Head of Treasury and External Finance, held a press conference on Tuesday 18th March, 2008 relating to treasury funding and prospects for 2008.
In his presentation, the Head of Treasury expressed his satisfaction with the continuing drop in the outstanding Treasury debt in 2007, which stands at 54.9% of GDP compared to 57.6% in 2006 and 62.6% 2005. The Treasury debt has seen a drop for the first time, to stand at approximately MDH 330 billion compared to MDH 331 billion in 2006.
In this respect Mr. CHORFI observed that the drop in the outstanding Treasury debt went hand in hand with the stabilisation of debt service at 3.2% of GDP. Proportionate to ordinary revenues, debt service represents 12.7% in 2007 compared to an average of 14.4% in the two previous years.
Regarding notable events relating to the external Treasury debt in 2007, Mr. CHORFI underlined:
1- The successful issue of an amount of Euro 500 million on the international financial market, with a very favourable spread of 55 base points and a 10 year maturity phase. This issue was graded ?Investment grade? by Standard and Poor and Fitch Ratings, had great success with investors, and was oversubscribed 3.5 times;
2- The closure of debt rescheduling with early repayment, using funds made available from the issue above-mentioned, of the outstanding and rescheduled debt to the London Club, and the coming to maturity of the sixth and last agreement with the Paris Club;
3- The continuation of active management operations of external debt, with the processing of an amount of approximately 5 billion Dirham, raising the total amount of debts processed by the Treasury to 54 billion Dirham since 1996;
4- The contribution, for the first time since 1993, of external loans to fund the Treasury deficit with a credit balance of 1.1 billion Dirham, or 3.5 billion Dirham if grants and donations are included.
As to the internal Treasury debt for 2007, Mr. CHORFI highlighted:
1- The drop of 1.9 billion Dirham in the outstanding internal debt. The outstanding internal debt stands at 264.1 billion Dirham, less than 44% of GDP;
2- The on-going improvement of key indicators for the internal debt outlay;
3- The stability of the internal debt term structure at 18%, 32%, and 50%, for the short,medium, and long term respectively;
4- The continuing reduction of banking debt which only accounts for 28% of the outstanding internal Treasury debt, and confirms the absence of eviction effect.
Furthermore, Mr. CHORFI stressed the fact that 2007 saw the settlement of Treasury liabilities through:
1- The complete and final repayment of conventional loan from Bank Al Maghrib;
2- The withdrawal of private deposits at Barid Al Maghrib placed in Treasury channels;
The Head of the Treasury announced that in 2008, the focus will essentially be on the improvement of the management of the Public Treasury, notably through:
3- Establishing an agreement with Bank Al Maghrib regarding the Treasury`s interventions on the monetary market for an active management of public funds;
4- Fine tuning public funds forecasts;
5- Generalising the system of electronic auctions;
6- Launching repurchase and exchange operations on Treasury bonds for an amount of 2 to 3 billion dirham.
As to the strategy for the external funding of the Treasury for 2008, Mr. CHORFI indicated that the Treasury will see to maintaining a credit balance for external funding,and sustain operations of active management of the external debt.
In conclusion, the Head of the Treasury announced that, for 2008, the internal funding needs of the Treasury, in the medium and the long term, are estimated at 27 billion dirham in gross value and 7 billion dirham in net value.
After the presentation, Mr. CHORFI and his teams answered questions from journalists representing the MAP, L`Economiste, and Al Adala Oua Tanmia, to elaborate further on the following points:
1- public debt structure;
2- external debt structure;
3- cost of debt management;
4- long term clearing from Treasury bonds;
5- role of the Treasury in conducting monetary policy;
6- efforts of the Treasury to ensure the budget deficit remains sustainable;
7- new proposals in the state accounting plan