IMF Staff Country Reports

This paper focuses on Colombia’s Request for an Arrangement under the Flexible Credit Line (FCL) and Cancellation of the Current Arrangement. Colombia qualifies for the FCL by virtue of its very strong economic fundamentals and institutional policy frameworks and track record of implementing very strong policies and commitment to maintaining such policies. The authorities intend to treat the new FCL arrangement as precautionary. The lower access reflects the authorities’ goal of continuing to reduce access as risks permit in the context of their gradual exit strategy. The arrangement should boost market confidence, and combined with the comfortable level of international reserves, provide insurance against external downside risks. The new arrangement under the FCL will provide added insurance against downside external risks and maintain market confidence. The authorities intend to continue to treat this new arrangement as precautionary and to further reduce access under the FCL arrangement, risks permitting, in the context of their gradual exit strategy.