IMF Staff Country Reports

Chile: Request for an Arrangement under the Flexible Credit Line and Cancellation of the Current Arrangement-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Chile

August 28, 2024

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International Monetary Fund. Western Hemisphere Dept. "Chile: Request for an Arrangement under the Flexible Credit Line and Cancellation of the Current Arrangement-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Chile", IMF Staff Country Reports 2024, 275 (2024), accessed November 21, 2024, https://doi.org/10.5089/9798400287565.002

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Summary

This paper highlights Chile’s Request for an Arrangement under the Flexible Credit Line (FCL) and Cancellation of the Current Arrangement. The imbalances built during the pandemic have been largely resolved shifting priorities to supporting stronger, more inclusive and greener medium-term growth. The near-term outlook has improved, primarily due to higher copper prices and prospects for increased lithium production. Chile qualifies for the FCL by virtue of its very strong economic fundamentals and institutional policy frameworks, and sustained track record of very strong macroeconomic policies. In the context of the still elevated external risks and a stronger near-term baseline outlook, the authorities have requested a reduction in access. They are committed to gradually lowering access depending on external risk developments and intend to continue treating the arrangement as precautionary. The proposed new commitment and cancellation of the current arrangement would have a net positive impact on the IMF’s liquidity position.

Subject: Credit, Debt service, External debt, Metal prices, Money, Prices, Public debt

Keywords: Credit, Debt service, FCL arrangement, Global, Gross international reserves, Inflation pressure, July monetary policy meeting, Metal prices, Policy rate cut, Western Hemisphere

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