- The IMF completed today the mid-term review of Chile's qualification under the Flexible Credit Line (FCL) arrangement. The arrangement was approved on August 27, 2024, for an amount of about US$13.8 billion (equivalent to 600 percent of quota).
- Chile continues to qualify for the FCL by virtue of its very strong economic fundamentals and institutional policy frameworks, and sustained track record of very strong macroeconomic policies.
- In the context of the still elevated external risks, the authorities expressed a desire to maintain the current level of access and are committed to gradually lowering access conditional on external risk developments. The authorities intend to continue to treat the arrangement as precautionary.
Washington, DC – August 26, 2025: The Executive Board of the International Monetary Fund (IMF) completed today, the mid-term review of Chile's qualification under the Flexible Credit Line (FCL) arrangement. [1] The Executive Board reaffirmed Chile's continued qualification to access FCL resources.
The current two-year FCL arrangement for Chile was approved by the IMF's Executive Board on August 27, 2024 (see Press Release No. 24/309 ), in the amount of SDR 10.4658 billion (600 percent of quota, about US$13.8 billion). [2] The Chilean authorities reiterated their intention to continue to treat the arrangement as precautionary. The authorities intend to gradually exit the arrangement conditional on external risk developments.
Following the Executive Board's discussion on Chile, Mr. Nigel Clarke, Deputy Managing Director, made the following statement:
"The economy is broadly balanced and growing at its potential, supported by a pickup in mining exports and a recovery in consumption. The global trade tensions have not yet significantly impacted the Chilean economy. However, external risks have increased since the approval of the FCL arrangement in August 2024. As a small open economy, Chile's growth outlook would be negatively affected by a global slowdown, a decline in copper prices, and capital flow volatility, all of which could be triggered by an escalation of trade tensions."
"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 new international reserve accumulation program. The authorities have appropriately focused on a prudent fiscal path to ensure debt sustainability, bringing inflation back to target, and supply-side measures to boost economic dynamism. Notably, the recently approved reform that aims to reduce the processing times for investment permits and improve regulatory predictability is a key step toward further strengthening Chile's investment environment."
"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."
[1] The FCL was established on March 24, 2009, as part of a major reform of the Fund's lending framework (see Press Release No. 09/85 ). 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.
[2] US$ amounts have been calculated using the exchange rate as of June 27th, 2024 (1 SDR = US$1.315010), consistent with the Staff Report for the FCL request.
