Via IMF (Den Internationale Valutafond)

IMF Executive Board Completes Review of Colombia’s Performance under the Flexible Credit Line Arrangement

May 22, 2019

On May 20, 2019, the Executive Board of the International Monetary Fund
(IMF) completed its review of Colombia’s qualification for the arrangement under the
Flexible Credit Line (FCL) and reaffirmed Colombia’s continued qualification to access FCL
resources. The Colombian authorities stated their intention to continue treating the
arrangement as precautionary. The current two-year FCL arrangement for Colombia in an
amount equivalent to SDR 7.848 billion (about US$11 billion) was approved
by the IMF’s Executive Board on May 25, 2018 (see Press Release No.

Colombia’s FCL arrangement was first approved on May 11, 2009 (see Press
Release No. 09/161) and successor arrangements were approved on May 7, 2010
(see Press Release No. 10/186), May 6, 2011 (see Press Release No. 11/165),
June 24, 2013 (see Press Release No. 13/229), June 17, 2015 (see Press
Release 15/281) and June 15, 2016 (see Press Release No. 16/279).

Following the Executive Board’s discussion on Colombia, Mr. David Lipton,
First Deputy Managing Director and Acting Chairman of the Board, made the
following statement:

“Colombia’s economic recovery is gaining momentum, supported by its very
strong policy frameworks and well-executed policies. Fiscal policy remains
anchored over the medium term by the structural deficit rule and monetary
policy is governed by a credible inflation targeting framework that has
delivered inflation close to target and anchored inflation expectations.
The financial system remains sound and financial sector supervision is
being further strengthened, including through a gradual convergence to
Basel III standards. A flexible exchange rate continues to be the primary
mechanism of adjustment to external shocks.

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“With elevated downside risks to global growth, Colombia remains exposed to
the materialization of external tail risks. Given the importance of the oil
sector for the Colombian economy and the relatively high share of
non-resident holdings of domestic government bonds, these risks include a
sharp correction in the price of oil or a repricing of risk in global
financial markets. In that context, the authorities are further
strengthening their policy frameworks and building policy space to ensure
Colombia’s continued resilience to external shocks, including through a
well-communicated program to gradually accumulate international reserves.

“The FCL arrangement continues to provide a cushion of international
liquidity and signals the strength of Colombia’s economy and its policy
frameworks. The authorities have clearly stated their intention to
continue to treat the FCL arrangement as precautionary and have taken
proactive steps to prepare for a gradual phasing out, risks permitting,
of the FCL in line with the temporary nature of the instrument. A
careful communication strategy remains important to facilitate a smooth
exit from the FCL.”

IMF Communications Department


Phone: +1 202 623-7100Email: