## Press Release: IMF Executive Board Approves New Two-Year US$11.5 Billion Flexible Credit Line Arrangement for Colombia

_IMF News, June 13, 2016_

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## Bibliographic details
- Published: June 13, 2016

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### Arrangement decision and key figures
- The Executive Board approved a successor two-year arrangement for Colombia under the Flexible Credit Line (FCL) in an amount equivalent to SDR 8.18 billion (about US$11.5 billion).
- The previous arrangement (SDR 3.87 billion, about US$5.4 billion) was canceled.
- The Colombian authorities stated their intention to treat the new arrangement as precautionary and do not intend to draw on it.
- Two-year FCL arrangements involve a review of eligibility after the first year.
- Qualified countries have the full amount available up-front, with no ongoing conditions.
- There is no cap on access to Fund resources under the FCL; access is determined on a case-by-case basis.
- If a country draws on the credit line, the repayment period is between three and a quarter and five years.
- The FCL is a renewable credit line, which could be approved for either one or two years.

### Mr. Mitsuhiro Furusawa’s statement: assessment of Colombia’s policy frameworks and risks
- Colombia has a track record of very strong policy frameworks, including an "inflation-targeting regime, a flexible exchange rate, effective financial sector supervision and regulation, and a fiscal policy guided by a structural balance rule."
- Authorities are "firmly committed to maintaining these policies and undertaking further initiatives to strengthen the resilience of the economy and boost competitiveness and growth."
- Macroeconomic policies have provided flexibility to deliver "a coordinated and gradual response to the large decline in oil prices."
- Exchange rate flexibility continues to be "the main shock absorber."
- The fiscal rule allows for "a smooth adjustment of expenditure to a weaker medium-term oil outlook."
- "The ongoing monetary policy tightening cycle will gradually bring inflation back to the target range, and the banking and corporate sectors remain in good financial health."
- "International reserves are adequate for normal times."
- Despite strong fundamentals and policy frameworks, "global risks have risen with the potential to increase the severity of shocks that Colombia could suffer."
- The new FCL arrangement, "with higher access, will provide added buffers and continue to play a significant role in supporting the authorities’ policies in the presence of these increased downside risks."
- The FCL will also "provide policy flexibility and serve as a temporary insurance that reinforces market confidence."
- "The authorities intend to continue to treat this facility as precautionary and to phase out its use as risks to the global outlook and commodity prices substantially recede."

### Background on Colombia’s FCL history and FCL features
- Colombia’s first FCL arrangement was approved on May 11, 2009 and was renewed on May 7, 2010, May 6, 2011, June 24, 2013, and June 17, 2015.
- The FCL was established on March 24, 2009 and further enhanced on August 30, 2010.
- 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.
- There is flexibility to either draw on the credit line at the time it is approved, or treat it as precautionary.

*Press Release No. 16/279 — June 13, 2016*

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## References

- [Colombia and the IMF](http://www.imf.org/external/country/COL/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release No. 09/161](https://www.imf.org/external/np/sec/pr/2009/pr09161.htm)
- [Press Release No. 10/186](https://www.imf.org/external/np/sec/pr/2010/pr10186.htm)
- [Press Release No. 11/165](https://www.imf.org/external/np/sec/pr/2011/pr11165.htm)
- [Press Release No. 13/229](https://www.imf.org/external/np/sec/pr/2013/pr13229.htm)
- [Press Release 15/281](https://www.imf.org/external/np/sec/pr/2015/pr15281.htm)
- [Press Release No. 10/321](https://www.imf.org/external/np/sec/pr/2010/pr10321.htm)
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_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr16279_