Typical street scene in Santa Ana, El Salvador. (Photo: iStock)
IMF Survey: Poland Seeks $20.5 Billion Credit Line From IMF
April 14, 2009
- Poland seeks precautionary credit line of $20.5 billion
- Becomes second country after Mexico to apply for new IMF facility
- Poland has sustained record of sound economic policies
Poland became the second country to seek access to a new credit line from the IMF for strongly performing economies to buttress them against the global economic crisis.
Shipyard worker in port of Gdansk, Poland, where IMF says economic fundamentals, policy framework are strong (photo: Katarina Stoltz/Reuters)
FLEXIBLE CREDIT LINE
Prime Minister Donald Tusk announced in Warsaw that the country was interested in a one-year precautionary arrangement under the IMF’s Flexible Credit Line (FCL) for $20.5 billion.
The IMF’s Executive Board will shortly consider a request from Mexico for a precautionary credit line of $47 billion. The new credit line was created as part of a revamp of the IMF’s lending facilities announced in March, aimed at strengthening the Fund’s ability to react to the global economic crisis.
Strong performer
IMF Managing Director Dominique Strauss-Kahn welcomed Tusk’s announcement. “I am very pleased by this positive response from Poland to the invitation I extended to strongly performing economies to use this new instrument to bolster international confidence.
“Poland has a sustained record of sound economic policies,” he said. “Its economic fundamentals and policy framework are strong, and the Polish authorities have demonstrated a commitment to maintaining this solid record. I therefore intend to move ahead rapidly in seeking approval by the Fund’s Executive Board of Poland’s request for an FCL arrangement.”
A more flexible approach
As part of its lending reform package, the IMF announced the creation of the flexible credit line, a type of insurance policy for strong performers, mainly among emerging market countries. Access to the FCL is restricted to countries that meet strict qualification criteria. But once a credit line has been approved, a country can draw on it without having to meet specified policy goals, as is normally the case for IMF loans.
At their meeting in London on April 2, the Group of Twenty industrialized and emerging market economies meeting agreed to boost the IMF’s lending resources to an eventual $750 billion as a means to strengthen the institution’s ability to combat the crisis.
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