The Executive Board of the International Monetary Fund (IMF) approved today a two-year arrangement for Chile under the Flexible Credit Line (FCL) in an amount of SDR 8.7215 billion (about US$11.8 billion),equivalent to 500 percent of quota and noted the cancellation of Chile’s previous arrangement.
The Chilean authorities stated their intention to treat the new arrangement as precautionary and continue to gradually lower access, conditional on external risk developments.
This is Chile’s fourth FCL arrangement since 2020 with access having been gradually lowered. The first FCL arrangement was approved on May 29, 2020 in an amount of SDR 17.443 billion (equivalent to 1,000 percent of quota).
The second arrangement, approved on August 29, 2022 was for an amount of SDR 13.954 billion (equivalent to 800 percent of quota).
The third arrangement, approved on August 27, 2024, was for an amount of SDR 10.466 billion (equivalent to 600 percent of quota).
Following the Executive Board’s discussion on Chile, Mr. Kenji Okamura, Deputy Managing Director, and Acting Chair, made the following statement:
“Chile’s economic growth has moderated, with a temporary slowdown in mining activity partly offset by higher copper prices. The war in the Middle East has further weighed on activity via higher oil prices.
The Chilean economy remains exposed to elevated external risks, with the outlook subject to sustained hostilities in the Middle East, continued trade tensions, a slowdown in growth in key trading partners, or disorderly corrections related to a reconsideration of AI-led productivity gains.”
“Against this backdrop, the authorities have continued to implement very strong policies to maintain macroeconomic balance and enhance the economy’s resilience, including through the Central Bank of Chile’s international reserve accumulation program.
The authorities have appropriately focused on a prudent fiscal path to ensure debt sustainability, bringing inflation back to target, and measures to boost potential growth. Notably, their National Reconstruction Plan aims to boost growth by accelerating investment and lifting potential output, with a focus on simplifying permitting and reducing the tax burden.”
“Chile’s very strong institutional policy frameworks support the economy’s resilience and capacity to respond to shocks. They include a credible inflation-targeting framework with a flexible exchange rate, a debt anchor and structural fiscal balance rule, and effective financial sector regulation and supervision.”
“In this context, the Flexible Credit Line (FCL) arrangement will continue to provide a valuable buffer against tail risks and a signal of Chile’s policy and institutional strengths. The authorities remain committed to treating the FCL arrangement as precautionary and gradually reducing access, in the context of their exit strategy, conditional on external risk developments.”
US$ amounts have been calculated using the exchange rate as of June 26th, 2026 (1 SDR = US$1.356150), consistent with the Staff Report for the FCL request.
The FCL was established on March 24, 2009 as part of a major reform of the Fund’s lending framework.
The FCL is designed for crisis prevention purposes as it provides the flexibility to draw on the credit line at any time during the period of the arrangement (one or two years), and subject to a mid-term review in two-year FCL arrangements.
Disbursements are not phased nor conditioned on compliance with policy targets as in traditional IMF-supported programs.
This large, upfront access with no ongoing conditions is justified by the very strong track records of countries that qualify for the FCL, which gives confidence that their economic policies will remain strong.
