Weekly Report - 16 June 2016 (WR-16-23)

COLOMBIA | IMF credit line. On 13 June the deputy managing director of the International Monetary Fund (IMF), Mitsuhiro Furusawa, approved an extension of a two-year Flexible Credit Line (FCL) programme with Colombia. Under the new deal Colombia will have access to an FCL of US$11.5bn, which replaces a previous agreement with the IMF, signed in June 2015, which offered US$5.4bn. Furusawa said that the decision answered to the fact that “Colombia has a track record of very strong policy frameworks, including an inflation-targeting regime, a flexible exchange rate, and a fiscal policy guided by a structural balance rule”. Meanwhile an IMF press release stated that while “Colombia’s macroeconomic policies have provided flexibility to deliver a coordinated and gradual response to the large decline in oil prices”, the new FCL agreement would “provide added buffers” to ensure that the government’s economic policies can be maintained in the presence of “increased downside risks”.

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