The International Monetary Fund replaced its flexible credit line for Poland with a two-year facility of $30 billion to help the largest eastern European Union economy secure investors’ confidence.
The two-year arrangement will replace Poland’s $21 billion credit line that the IMF approved in July for one year. In August, the agency changed rules for the facility, which is reserved for countries that qualify based on economic fundamentals.
Polish authorities plan to “treat the arrangement as precautionary and do not intend to draw” on the flexible credit line, the IMF said.
Poland was the only economy in the EU that avoided recession last year, helped by domestic demand and low interest rates. The economy expanded 4.2 percent in the third quarter, the fastest in two years. The Washington-based lender’s board said the country’s economic “growth is projected to remain solid and balanced,” according to an e-mailed statement.
“Sizable downside risks remain, particularly from the possibility of further spillovers of financial turbulence in other parts of Europe,” John Lipsky, the IMF’s No. 2 official, wrote in an e-mailed statement. “The augmented duration and size” of the credit line will allow the measure “to play an even stronger role in insuring Poland against external risks while continuing to support the authorities’ overall macroeconomic strategy.”
© Copyright 2022 Bloomberg News. All rights reserved.