Poland Ends the Two-Year €8.24 Billion Flexible Credit Line Arrangement with the IMF

The Polish authorities have notified the International Monetary Fund (IMF) of their decision to end, effective November 3, 2017, the arrangement under the Flexible Credit Line (FCL) approved by the IMF’s Executive Board on January 13, 2017.

Poland’s first FCL arrangement was approved by the IMF’s Executive Board after the onset of the global financial crisis and was followed by four successor arrangements aimed at providing additional buffers against external shocks. [1] Over these years, Poland has treated the FCL as precautionary and continued to strengthen its foreign exchange reserves and fiscal position. Since January 2015, Poland has been gradually reducing access under the FCL, in line with its intention to exit from the arrangement once external conditions improve. At the conclusion of the 2017 Article IV Consultation on July 7, 2017 [2] and against the background of reduced external risks for Poland, the IMF’s Executive Board commended the authorities for very strong policy and institutional frameworks, noting that maintaining sound institutions and policies would further strengthen Poland’s resilience against external risks.

The FCL was established on March 24, 2009 and further enhanced on August 30, 2010 [3]. The FCL is designed for crisis prevention purposes as it provides the flexibility to draw on the credit line at any time, or treat it as precautionary. Disbursements are neither phased nor conditioned on compliance with policy targets as in traditional IMF-supported programs. The FCL is available to qualified countries with very strong fundamentals, policies, and track records of policy implementation. The FCL is a renewable credit line, which could be approved for either one or two years. There is no cap on access to Fund resources under the FCL, and access is determined on a case-by-case basis.

Poland is a member of the IMF since 1986 and has a quota of SDR 4,095.40 million (about €5,190.8 million).