On June 28, 2006, Standard&Poor's Ratings Services affirmed its 'BB+' long-term and 'B' short-term foreign currency, and its 'BBB' long-term and 'A-3' short-term local currency sovereign credit ratings on the Kingdom of Morocco. The outlook is stable. The ratings on Morocco are supported by robust external indicators, including high external liquidity and a public sector net external asset position. The ratings are also underpinned by strong official commitment to reform, to achieve long-term fiscal consolidation and greater economic diversification. The ratings remain constrained by limited fiscal flexibility, a large sovereign debt burden, and weak socioeconomic indicators. We expect Morocco's external position to remain solid, despite the negative impact of high global oil prices on the trade deficit. The
