The 2025 Review of The Short-Term Liquidity Line
December 17, 2025
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The Short-term Liquidity Line (SLL), introduced in 2020, was designed as a
revolving liquidity backstop for countries with very strong economic
fundamentals and institutional policy frameworks. It aims to address short-term,
moderate balance of payments needs arising from capital flow volatility, helping to
prevent emerging liquidity pressures from escalating into broader macroeconomic or
financial instability. However, uptake has been limited, with only one arrangement for
Chile in 2022, which was canceled shortly thereafter in favor of a Flexible Credit Line
(FCL).
revolving liquidity backstop for countries with very strong economic
fundamentals and institutional policy frameworks. It aims to address short-term,
moderate balance of payments needs arising from capital flow volatility, helping to
prevent emerging liquidity pressures from escalating into broader macroeconomic or
financial instability. However, uptake has been limited, with only one arrangement for
Chile in 2022, which was canceled shortly thereafter in favor of a Flexible Credit Line
(FCL).
Subject: Asset and liability management, Balance of payments, Balance of payments need, Capital account, Capital flows, Financial crises, Financial institutions, Financial safety nets, Lines of credit, Liquidity
Keywords: Balance of payments need, Capital account, Capital flows, Financial safety nets, Lines of credit, Liquidity
Pages:
32
Volume:
2025
DOI:
Issue:
046
Series:
Policy Paper No. 2025/046
Stock No:
PPEA2025046
ISBN:
9798229032896
ISSN:
2663-3493
