IMF expects to accept loan request from Colombia

IMF expects to accept loan request from Colombia

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The International Monetary Fund (IMF) said on Thursday that it expects to approve a request from the Colombian government to renew a flexible credit line for 7.85 billion special drawing rights (SDRs), equal to roughly $10.8 billion.

"Given Colombia's very strong policy frameworks and track record, IMF Managing Director Kristalina Georgieva intends to recommend approval of the 2020 [flexible credit line] arrangement for Colombia when the IMF executive board meets again to take a decision in the following weeks," the fund said in a press release.

The renewable credit line gives Colombia access to financing "with no ongoing conditions," according to the IMF.

Georgieva said last week that the IMF could allocate additional SDRs to provide short-term funds for emerging markets to address the economic impact of the coronavirus outbreak.

Colombia received $250 million in emergency funding from the World Bank on April 4, but the Finance Ministry requested the IMF loan on Tuesday, as spiraling healthcare costs and falling oil prices threaten to double the projected budget deficit to more than $12 billion this year, according to press reports.

The IMF has doubled its emergency financing to $100 billion and it is ready to lend up to $1 trillion to address the health crisis.