Colombia - First Review of the Extended Arrangement -- Staff Report; News Brief on the Executive Board Discussion; And Statement by the Authorities of Colombia (Electronic book text)

1. On May 11, 2009 the IMF Executive Board approved an FCL arrangement for Colombia for 900 percent of quota (SDR 6.966 billion, or about US$11 billion) to bolster confidence in the country's policy and institutional frameworks at a time of heightened global uncertainty. It was envisaged that Colombia's strong institutional policy framework, including its flexible exchange rate, inflation targeting regime and medium term fiscal framework, would enable the authorities to adopt countercyclical policies to mitigate the adverse effects of the crisis on domestic demand. The FCL arrangement was intended to provide additional protection to the balance of payments while those policies were being pursued. Developments since the FCL approval have been generally positive and the authorities continue to treat the FCL resources as precautionary.