Press Release: IMF Executive Board Completes Review of Poland’s Performance under the Flexible Credit Line Arrangement

January 13, 2016

Press Release No. 16/06
January 13, 2016

On January 13, 2016, the Executive Board of the International Monetary Fund (IMF) completed its review of Poland’s qualification for the arrangement under the Flexible Credit Line (FCL), and reaffirmed its continued qualification to access FCL resources. At the request of Polish authorities, the Executive Board also lowered the FCL access to SDR 13 billion (about €16.59 billion). The Polish authorities stated their intention to continue treating the arrangement as precautionary.

The current two-year FCL arrangement for Poland in an amount equivalent to SDR 15.5 billion (about €19.78 billion at the time of approval) was approved by the IMF’s Executive Board on January 14, 2015 (see Press Release No. 15/05).

Following the Executive Board’s discussion on Poland, Mr. David Lipton, the First Deputy Managing Director and Acting Chair of the Board, made the following statement:

“Poland continues to benefit from its very strong economic fundamentals and policy frameworks. Economic growth is strong and unemployment is declining. The current account deficit has narrowed, thereby further strengthening economic fundamentals, while international reserves remain adequate. Fiscal consolidation has led to an exit from the Excessive Deficit Procedure, and public debt is sustainable. Poland’s credible inflation targeting regime has been effective in managing deflationary pressures, and inflation has started to pick up. The banking system is liquid, profitable and well capitalized, and the financial sector framework has been further strengthened.

“The authorities have stated their commitment to very strong policies and institutional frameworks with a focus on advancing inclusive growth, while maintaining fiscal discipline and financial stability. The outlook is for continued robust growth. Risks have somewhat receded but remain elevated amid continued uncertainty surrounding the effects of U.S. monetary policy tightening and potential adverse developments in key emerging market economies.

“The FCL arrangement reinforces Poland’s buffers against external risks. The lower access is appropriate in light of somewhat lower risks and the improvement in Poland’s fundamentals. The authorities intend to continue to treat the arrangement as precautionary and to gradually exit from the FCL once external risks recede.”

The IMF has established the FCL on March 24, 2009 and further enhanced it on August 30, 2010 (see Press Release No. 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 (see Press Release No. 09/85). The FCL is a renewable credit line, which can 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.

Poland’s first FCL arrangement was approved on May 6, 2009 (see Press Release No. 09/153). Successor arrangements were approved on July 2, 2010 (see Press Release No. 10/276); January 21, 2011 (see Press Release No. 11/15); and January 18, 2013 (see Press Release No. 13/17).

Poland is a member of the IMF since 1986 and has a quota of SDR 1,688.40 million (about €2,154.2 million).


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