Poland to seek 2Y extension of IMF's USD 34bn Flexible Credit Line - finance ministry source

By bne IntelliNews February 4, 2014

Poland is seeking a two-year extension of its Flexible Credit Line (FCL) from the International Monetary Fund (IMF), a finance ministry source told Intellinews.

The current FCL to the amount of 22bn Special Drawing Rights (SDR), roughly equivalent to USD 34bn, runs out in January 2015. Poland will seek an extension to the same amount.

Poland has not drawn on the FCL, in place since 2009, even when the zloty gave up 30% of its value that year. As the only European Union member state to avoid recession since the financial crisis of 2008, Poland has not felt the need to use the funds. The FCL has nevertheless served to bolster investor perception of the country and its international stability, the source said.

Only countries “with very strong economic fundamentals and policy track records can apply for the FCL when faced with potential or actual balance of payments pressures”, the IMF said in a statement posted on its website. Poland is one of three countries to avail themselves of the facility, alongside Mexico and Colombia.

Fitch Ratings sees the FCL as a positive for Poland’s positive rating.

The National Bank of Poland (NBP) does not have any objections to the extention, a member of the central bank’s Monetary Policy Council (MPC) said.

by Aleksander Nowacki in Warsaw

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