IMF renews USD10.8 billion credit line for Colombia

WASHINGTON (AFP) – The Interna-tional Monetary Fund (IMF) on Friday renewed a nearly USD11 billion credit line for Colombia as a backstop amid the growing economic impact of the coronavirus pandemic.

Colombia has had a Flexible Credit Line (FCL) since May 2009, and the IMF board has renewed it every two years, providing the country with money that could be deployed to head off a crisis. But Bogota has never drawn on the funds, treating it as a precaution.

The Washington-based lender praised the South American nation’s early and forceful response to the pandemic, which will help it weather the oncoming recession.

“In the wake of the pandemic, Colombia’s economy is expected to contract for the first time in two decades,” IMF First Deputy Managing Director Geoffrey Oka-moto said in a statement.

“Risks to the economy is sharply skewed to the downside,” he said, as the country is vulnerable to falling commodity prices as well as a “further deterioration” of the crisis in neighbouring Venezuela, which has caused millions of refugees to flee to Colombia and other nations in the region.

“The new arrangement under the FCL will help Colombia manage heightened external risks, protect ongoing efforts to effectively respond to the pandemic, integrate migrants, foster inclusive growth and reduce external vulnerabilities,” Okamoto said.

A sign is seen outside the headquarters of the International Monetary Fund (IMF) in Washington DC. PHOTO: AFP