The International Monetary Fund approved an arrangement Friday where Colombia will have access to a loan of $3.46 billion over the course of a year, under the fund’s flexible credit line, reports imarketnews.com.
A flexible credit line allows the borrower to draw on the funds at any time up to the specified limit, and were given to “wealthier emerging countries” following the 2008 financial crisis to maintain investor confidence.
The new credit line is down from the $10.5 line made available to the Andean nation in 2009, and Colombian authorities said that it would be used purely as a precaution.
John Lipsky, of the IMF, said that Colombia was receiving the credit line because of the country’s “solid macroeconomic performance in recent years” and its “flexible exchange rate and prudent debt managment” which help to “reduce vulnerabilities.”
“Colombia’s strong economic fundamentals … give confidence that the authorities are well prepared to manage risks and pressures in the event that the global environment deteriorates,” Lipsky said.
Colombia is one of just three countries, including Mexico and Poland, to receive the IMF’s flexible creditline.