IMF raises Colombia’s credit line after virus slump

Colombia’s economy is expected to shrink 8.2 percent this year, worse than the 2.5 percent drop originally forecast. (AFP)
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Updated 26 September 2020

IMF raises Colombia’s credit line after virus slump

  • Colombia has had a Flexible Credit Line (FCL) since May 2009

WASHINGTON: The International Monetary Fund (IMF) said it had raised by $6.5 billion a credit line offered to Colombia to about $17.2 billion, aiming to help the country cope with the economic effects of COVID-19.

“The augmentation was approved in light of Colombia’s continued qualification with very strong institutional policy frameworks, track record of economic performance and policy implementation, and against a backdrop of higher external risks and a larger than expected adverse impact from the pandemic,” the Washington-based crisis lender said in a statement.

Colombia has had a Flexible Credit Line (FCL) since May 2009, and the IMF board has renewed it every two years, providing the country with money that could be deployed to head off a crisis.

The latest renewal in May was for $10.8 billion, but deputy IMF managing director Antoinette Sayeh said in a statement that Colombia’s downturn was deeper than expected and the country is set for its worst recession on record.

“The augmentation of access under the current FCL arrangement will help Colombia manage heightened external risks, protect ongoing efforts to effectively respond to the pandemic, continue to integrate migrants from Venezuela, foster inclusive growth and reduce external vulnerabilities,” she said.

IMF mission chief for Colombia Hamid Faruqee said the country’s economy is expected to shrink 8.2 percent this year, worse than the 2.5 percent drop originally forecast.

“We do expect growth to rebound,” he said, predicting GDP increasing four percent next year.

Colombia is one of five countries that have received an FCL, along with Chile, Mexico, Peru and Poland, which exited the arrangement in late 2017.

None of the countries have drawn on the funds, the IMF said.


China delays timetable for Boeing 737 MAX return

Updated 53 min 28 sec ago

China delays timetable for Boeing 737 MAX return

  • The best-selling 737 MAX was grounded around the world since March 2019 after two deadly crashes blamed on the plane's new navigation system 

BEIJING: China, the first country to ground Boeing Co’s 737 MAX following two fatal crashes, has not set a timetable for the plane’s return to service, the head of its aviation regulator said on Thursday.

The Civil Aviation Administration of China has set three principles for the jet to return to service in China, Feng Zhenglin, director at the agency, said.

Design changes need to be certified, pilots need to receive proper training and effective improvements need to be made to address the specific findings of investigations into the crashes, Feng said.

“Based on these three principles, we have not set a timetable for Boeing 737 MAX’s return to service here. As long as these conditions are met, we’re happy to see the MAX return to service in China,” said Feng.

“But if these conditions cannot be met, we still have to carry out strict airworthiness certification in order to ensure safety.”

The 737 MAX, which has been grounded around the world since March 2019, is expected receive regulatory approval from the European Union Aviation Safety Agency to resume flying in November.

The US Federal Aviation Authority (FAA) has not publicly disclosed a timeline for the MAX’s return of service, but sources familiar with the matter have said it is expected to lift its grounding order around mid-November, although the date could slip.

American Airlines has said that it plans to return the jet to service at the year-end, subject to FAA approval.