IMF expands quota to Colombia, and the country would use part for the first time

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The International Monetary Fund (IMF) approved the extension of the flexible credit line that it has granted to Colombia for a decade and the country would use for the first time part of that quota of resources that it has. The quota was expanded from $ 10.8 billion to $ 17.3 billion, and the country is considering the possibility of using about a third, due to the budgetary demands that have arisen from the current crisis caused by the pandemic.

When making the announcement, the Banco de la República commented that the increase in the amount will strengthen the country's international liquidity position in the context of the health emergency. The new extension, with a considerable expansion of the quota, comes at a time when the world economy is hit by the pandemic and, in cases such as Colombia, is suffering from a significant decrease in the export prices of oil and other raw materials .

For these reasons, the Colombian authorities considered it prudent to request an increase in the amount of access of the flexible credit line of the IMF.

Banco de la República said, for these reasons, the Colombian authorities considered it prudent to request an increase in the amount of access to the flexible credit line of the IMF.

According to the issuer's announcement, the approval reflects the continued support of the IMF's Executive Board for Colombia's economic policy framework and its track record of sound and prudent macroeconomic policies. The Banco de la República indicated that in the midst of the current circumstances, the Colombian authorities are contemplating making a partial disbursement of the credit line to contribute to the financing of the budget in response to the pandemic.

The Government is considering disbursing from the credit line a value of up to 187.5 percent of the country's quota in the organization (around 5.3 billion dollars) within the framework of its 2020 financial plan. After the disbursement is made, the rest of the quota will continue to be available as a precaution.

The expansion of the flexible credit line provides greater flexibility to the country to respond to shocks and insure against greater external risks. In line with what has been stated on previous occasions, the Colombian authorities plan to reduce access to the flexible credit line once the exceptional situation of the world economy improves and there is evidence of a reduction in external risks affecting the economy.