1. This note assesses the impact of the proposed Flexible Credit Line (FCL) arrangement for Poland on the Fund’s finances and liquidity position, in accordance with the policy on FCL arrangements.2 The proposed arrangement would cover a 24-month period and access would be in an amount of SDR 22.0 billion (1,303 percent of quota). It would succeed the existing FCL arrangement, which would be cancelled prior to approval of the proposed arrangement. The full amount of access proposed would be available throughout the arrangement period, in one or multiple purchases.3 The authorities intend to treat the arrangement as precautionary.
See Flexible Credit Line (FCL) Arrangements, Decision No.14283-(09/29), adopted March 24, 2009, as amended. Also see GRA Lending Toolkit and Conditionality—Reform Proposals (3/13/09), the Fund’s Mandate – the Future Financing Role: Reform Proposals (6/29/2010), and the IMF’s Mandate – the Future Financing Role: Revised Reform Proposals and Revised Proposed Decisions (Supp. 2, 8/25/2010).
If the full amount is not drawn in the first year of the arrangement, a review of Poland’s continued qualification under the FCL arrangement must be completed before purchases can be made after the first year.
Soon after the approval of the FCL arrangement, the 2008 Quota and Voice Reform became effective and increased Poland’s quota from SDR 1,369.0 million to SDR 1,688.4 million. This implied that the access under the FCL was reduced to 1,135 percent of quota.
A more detailed description of external and public debt is provided in the staff report.
Note that the debt sustainability analysis does not assume drawings under the FCL arrangement.
If the activation threshold for triggering access to bilateral borrowing were reached (modified FCC of SDR 100 billion), these resources could be drawn in accordance with the borrowing modalities approved by the Board on June 15, 2012.