The Executive Board of the International Monetary Fund (IMF) completed today its review of Poland’s qualification for the arrangement under the Flexible Credit Line (FCL) and reaffirmed Poland’s continued qualification to access FCL resources. The Polish authorities have indicated that they intend to continue treating the arrangement as precautionary.

The two year arrangement for Poland for an amount equivalent to SDR 19.17 billion (about US$29.4 billion) was approved on January 21, 2011 (see Press Release No. 11/15). Poland’s first FCL arrangement was approved on May 6, 2009 (see Press Release No. 09/153). A successor arrangement was approved on July 2, 2010 (see Press Release No. 10/276).

Following the Executive Board discussion of Poland, Ms. Nemat Shafik, Deputy Managing Director and Acting Chair, made the following statement:

“The FCL arrangement for Poland, approved a year ago in a context of heightened external risks has played an important role in bolstering market confidence and has supported the authorities’ macroeconomic strategy. Today, the Executive Board affirmed that Poland continues to meet the qualification criteria for access to FCL resources.

“Poland’s rapid return to strong growth after the global crisis attests to Poland’s strong economic fundamentals, policy track record, and policy institutions, which include a robust fiscal framework that balances short-term cyclical with medium-term fiscal sustainability concerns, a credible inflation-targeting regime that anchors inflation expectations, and an effective supervisory framework that helps to preserve financial stability.

“The authorities are committed to a steady rebuilding of policy buffers to forestall external risks. Fiscal consolidation and sound monetary policy will be maintained, and the banking system will be closely monitored. The floating exchange rate regime will continue to play a key role in buffering external shocks.

“Risks to Poland’s outlook are predominantly on the downside, mainly reflecting the possibility of spillovers from the rest of Europe. However, Poland retains ample policy space to contain the potential fallout from external shocks, supported by the FCL arrangement, and the authorities remain committed to maintain very strong policies.”