## Press Release: IMF Executive Board Approves New Two-Year US$5.45 Billion Flexible Credit Line Arrangement for Colombia

_IMF News, June 17, 2015_

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**Canonical URL:** [Press Release: IMF Executive Board Approves New Two-Year US$5.45 Billion Flexible Credit Line Arrangement for Colombia](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr15281)

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## Bibliographic details
- Published: June 17, 2015

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### Approval and key terms
- The Executive Board approved a successor two-year arrangement for Colombia under the Flexible Credit Line (FCL) in an amount equivalent to SDR 3.87 billion (about US$5.45 billion).
- The Colombian authorities stated their intention to treat the new arrangement as precautionary and do not intend to draw on it.
- FCL characteristics described:
  - Renewable credit line 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; access is determined on a case-by-case basis.
  - Qualified countries have the full amount available up-front, with no ongoing conditions.
  - Flexibility to either draw on the credit line at approval or treat it as precautionary.

### Macroeconomic assessment and policy strengths (statement by Mr. David Lipton, First Deputy Managing Director and Acting Chairman of the Board)
- Structural and policy strengths highlighted:
  - Inflation-targeting regime.
  - Flexible exchange rate.
  - Effective financial sector supervision and regulation.
  - Fiscal policy guided by a structural balance rule.
- Policy actions and outcomes:
  - Macroeconomic policies provided flexibility to mitigate the impact of the recent sharp decline in world oil prices.
  - The fiscal rule allows a smooth adjustment of expenditure to a dimmer medium-term oil outlook.
  - The flexible exchange rate regime acts as a shock-absorbing mechanism helping the economy adapt to shifts in global economic and financial conditions.
  - Banking and corporate sectors remain in good financial health.
  - The central bank has used abundant capital inflows to further build up international reserves.
- Authorities’ commitments:
  - Firm commitment to maintain current policies.
  - Undertake further initiatives to strengthen resilience, boost competitiveness, and foster inclusive growth.

### Risks, role of the FCL, and policy intent
- External risks:
  - Adverse external risks pose strong headwinds and, if they materialize, could weaken Colombia’s external position.
- Role of the FCL:
  - Access to the Fund’s FCL will continue to play a significant role in supporting the authorities’ policies in the presence of downside risks.
  - A successor FCL arrangement, treated as precautionary by the authorities, will provide policy flexibility and serve as temporary insurance that reinforces market confidence.
- Authorities’ stated exit intention:
  - The authorities intend to phase out the use of the FCL facility as global risks affecting Colombia decrease substantially.

### Background on Colombia’s FCL arrangements and the facility
- Colombia’s prior FCL approvals:
  - First FCL approved on May 11, 2009 (Press Release No. 09/161).
  - Renewals on May 7, 2010 (Press Release No. 10/186), May 6, 2011 (Press Release No. 11/165), and June 24, 2013 (Press Release No. 13/229).
- FCL history and purpose:
  - The FCL was established on March 24, 2009 and further enhanced on August 30, 2010 (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 (Press Release No. 09/85).

### Practical contact information (from press release)
- IMFCOMMUNICATIONS DEPARTMENT, Media Relations
  - E-mail: media@imf.org
  - Phone: 202-623-7100

*Press Release No. 15/281 — June 17, 2015*

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## References

- [Colombia and the IMF](http://www.imf.org/external/country/COL/index.htm)
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_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr15281_