Press Release: IMF Managing Director Dominique Strauss-Kahn Welcomes Former Yugoslav Republic of Macedonia’s Interest in Precautionary Credit Line Arrangement
December 8, 2010Press Release No. 10/478
December 8, 2010
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), made the following statement today:
“I welcome the decision by the Former Yugoslav Republic of Macedonia to request a Precautionary Credit Line (PCL) arrangement. Macedonia would be the first IMF member to take advantage of this new arrangement. I am very pleased by this positive response from Macedonia to the invitation I extended to economies with sound economic fundamentals and policies to use this new instrument to bolster international confidence.
“Macedonia has a sustained track record of sound economic policies. Its economic fundamentals and policy framework are strong, and the Macedonian 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 Macedonia's request for a PCL arrangement.”
The Former Yugoslav Republic of Macedonia requested a two-year arrangement under the IMF’s Precautionary Credit Line (PCL) in the amount equivalent to SDR 344.5 million (approximately €400 million, 500 percent of quota) in the first year, rising to SDR 413.4 million (approximately €480 million, 600 percent of quota) in the second year.
The PCL is an instrument established earlier this year that is available to Fund members with sound economic fundamentals and policies that do not have actual financing needs but face risks that could give rise to such needs (see Press Release No. 10/321). Thus, countries with PCL arrangements would be expected not to draw upon the available funds unless there is a deterioration in external conditions. The PCL arrangement provides countries with confidence that in the event of adverse developments they have a deep reservoir to draw upon to preserve stability. Moreover, having a PCL arrangement in place should help to strengthen confidence and facilitate better access to private capital markets.