IMF executive board approves new two-year US$1.5 billion FCL arrangement for Costa Rica

• The executive board of the International Monetary Fund (IMF) approved today a two-year arrangement for Costa Rica under the Flexible Credit Line (FCL) in an amount equivalent to SDR$1.1082Bn (about US$1.5Bn, equivalent to 300.0% of quota).
• Costa Rica has maintained a close relationship with the Fund through surveillance, capacity development, and lending. The authorities sought Fund support through the Rapid Financing Instrument (in April 2020), an Extended Fund Facility (EFF) arrangement (approved on March 1, 2021, and completed on June 14, 2024), and a Resilience and Sustainability Facility (RSF) arrangement (approved on November 14, 2022, and completed on June 14, 2024).
• The FCL is reserved for countries with very strong policy frameworks and track records in economic performance. Costa Rica’s very strong fundamentals and institutional policy frameworks, sustained track records of implementing very strong policies, and continued commitment to maintaining such policies in the future all justify the transition to an FCL arrangement.
• Following the executive board’s discussion on Costa Rica, Kenji Okamura, deputy managing director and acting chair, issued the following statement: “Nonetheless, Costa Rica is vulnerable to the shifting external environment. In the context of increased external risks, the new Flexible Credit Line (FCL) arrangement will provide valuable insurance. Downside risks include a prolonged increase in global uncertainty, slower growth in major trading partners, tighter global financial conditions, and higher oil prices.”

(Source: Caribbean News Global)