Aug 25 (Reuters) – Chile remains qualified for its current Flexible Credit Line due to its very strong economic fundamentals and institutional policies, as well as its strong macroeconomic record, the International Monetary Fund (IMF) said on Friday.
The agreement was approved in August 2022 for an amount of around 18.5 billion dollars. The authorities intend to continue to treat it as “precautionary.”
“The authorities have expressed their desire to keep the level of access unchanged and maintain their commitment to gradually abandon the agreement depending on the evolution of external risks,” the multilateral organization said in a statement.
“The Chilean economy is nearing the end of its adjustment cycle towards more sustainable growth and lower inflation in a complex international context,” IMF Deputy Managing Director Antoinette Sayeh was quoted as saying in the document.
Chilean activity has been adjusting after the rapid recovery from the impact of the COVID-19 pandemic due to large government aid and withdrawals from pension savings, which led to strong inflationary pressures.
After an extensive monetary tightening to control prices, the Central Bank has started a cycle of cuts in its key interest rate.
The IMF added that internal risks have largely diminished as uncertainty surrounding the constitutional reform process has decreased, while the risk of social discontent persists due to unsatisfied demands and deteriorating security.
(Reporting by Kylie Madry, written by Fabián Andrés Cambero)
2023-08-25 22:08:08
#IMF #Chile #remains #qualified #flexible #credit #line #due #solid #fundamentals
