Press Release No. 14/594

Press Release: Statement by IMF First Deputy Managing Director David Lipton on Poland

December 19, 2014

Mr. David Lipton, First Deputy Managing Director of the International Monetary Fund (IMF), made the following statement today:

“The Polish authorities have informed the IMF that they are interested in seeking a successor precautionary arrangement under the IMF’s Flexible Credit Line (FCL¹). I welcome the Polish authorities’ interest in a new two-year FCL arrangement. The successor arrangement with a reduced access would follow Poland’s current two-year FCL for SDR 22 billion (about US$33.8 billion) that will expire in January 2015 (see Press Release No. 13/17).

“Poland continues to benefit from very strong economic fundamentals and policies. Poland’s flexible exchange rate, credible inflation targeting regime, sound fiscal policy, and effective financial supervision have helped it to successfully weather several bouts of market turbulence.

“The economy is gradually recovering from the 2012–13 slowdown. While external risks have somewhat abated, they remain elevated. These include a protracted slowdown in the euro area, continued geopolitical tensions in the region, and uncertainty surrounding normalization of monetary policy in the United States. At the same time, the authorities’ sustained efforts to rebuild policy buffers and further strengthen the policy framework have improved economic fundamentals and reduced financing needs. In this context, I share the authorities’ view that a new FCL arrangement with reduced access would continue to provide adequate insurance against adverse external risks, while supporting the authorities’ sound economic strategy. I therefore intend to move ahead rapidly in seeking approval by the Fund’s Executive Board of Poland’s request.”

¹The FCL was established on March 24, 2009 and further enhanced on August 30, 2010 (see Press Release Nos. 09/85 and 10/321). The FCL is available to countries with very strong fundamentals, policies, and track records of policy implementation and is particularly useful for crisis prevention purposes. FCL arrangements are approved for countries meeting pre-set qualification criteria. The FCL is a renewable credit line, which could be approved for either one or two years. Two-year arrangements involve a review of eligibility after the first year. If the country draws on the credit line, the repayment period is between three and five years. There is no cap on access to Fund resources under the FCL, and access is determined on a case-by-case basis. Qualified countries have the full amount available up-front, with no ongoing conditions. There is flexibility to either draw on the credit line at the time it is approved, or treat it as precautionary.