## IMF Executive Board Approves Two-Year US$18.5 Billion Flexible Credit Line for Chile

_IMF News, August 29, 2022_

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## Bibliographic details
- Published: August 29, 2022

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### Summary
- The Executive Board of the International Monetary Fund approved a two-year Flexible Credit Line (FCL) arrangement for Chile in the amount of SDR 13.954 billion (about US$18.5 billion).
- The Chilean authorities intend to treat the FCL as precautionary.
- The authorities notified the Fund of their decision to cancel the existing Short-term Liquidity Line (SLL) of SDR 2.529 billion (about US$3.3 billion).

### Purpose and key features of the FCL
- The FCL can be drawn at any time and is designed to flexibly address both actual and potential balance of payments needs.
- Drawings under the FCL are not phased nor tied to ex-post conditionality as in regular IMF-supported programs.
- The FCL will augment Chile’s precautionary reserve buffers on a temporary basis and provide substantial insurance against a broad range of risks.

### Rationale and qualification for Chile
- Chile qualifies for the FCL by virtue of its very strong economic fundamentals and institutional policy frameworks, and a sustained track record of implementing very strong policies.
- Qualification criteria for an arrangement under the FCL are the same as for the SLL.
- The Executive Board approval cites Chile’s commitment to maintaining very strong policies in the future.

### Risks and scenarios the FCL addresses
- The FCL is intended to provide insurance against:
  - a possible abrupt global slowdown;
  - commodity price shocks;
  - spillovers from Russia’s war in Ukraine;
  - a sharp tightening of global financial conditions.

### Authorities’ actions and intentions
- The Chilean authorities intend to treat the FCL as precautionary and to exit the arrangement when external conditions allow.
- The authorities cancelled the existing SLL of SDR 2.529 billion (about US$3.3 billion), consistent with current Fund policies.

### Policy frameworks and institutional strengths highlighted
- Long-standing structural fiscal balance rule.
- Credible inflation targeting with a flexible exchange rate.
- Sound financial system supported by effective regulation and supervision.
- Continued implementation of very strong policies to mitigate risks, preserve macroeconomic stability, and support vulnerable groups while advancing ambitious reforms.

### Key statistics and references preserved exactly from the source
- FCL amount: SDR 13.954 billion (about US$18.5 billion).
- Access: 800 percent of quota.
- SLL cancelled: SDR 2.529 billion (about US$3.3 billion); 145 percent of quota.
- FCL establishment date: March 24, 2009 (see Press Release No. 09/85).
- Exchange rate used for US$ amounts: SDR 0.755229/US$ as of August 2, 2022.
- Press Release No.: 22/294.
- Date of press release: August 29, 2022.

*IMF Executive Board Approves Two-Year US$18.5 Billion Flexible Credit Line for Chile*

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## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Chile and the IMF](http://www.imf.org/external/country/CHL/index.htm)
- [IMF Quotas -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/imf-quotas)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/08/29/pr22294-chile-imf-executive-board-approves-two-year-flexible-credit-line-for-chile_