NEW YORK (Reuters), The International Monetary Fund approved Friday a flexible credit line (FCL) of $9.8billion for Colombia. This was approved by the IMF in a statement. Colombia said it will treat the FCL as “precautionary”.

According to the Fund, “Colombia is eligible for (FCL) due to its extremely strong economic fundamentals as well as institutional policy frameworks. It also has a track record of implementing highly strong policies and commitment in maintaining these policies.”

According to IMF data, the Andean country drew approximately $5.4 billion in December 2020 from an FCL Agreement approved earlier that year for COVID-19. They did not withdraw FCLs approved in 2016 or 2018.

Colombia, according to The Fund’s assessment of external risks such as inflationary pressures or a rise in risk premias, is still at high vulnerability. However this credit line will increase market confidence and support the exporter.

Colombia’s central banks applauded this approval, and claimed that the international $58 billion reserves serve as a buffer in the event of an emergency.

Leonardo Villar from the central bank chief said that although they don’t need them, it’s important to have them for a situation in which a crisis occurs.

He added that “they are resources which makes international investors, international lender willing to lend to our when we require because they know this cushion is for unexpected circumstances.”

After shrinking 6.8% by 2020 due to the coronavirus epidemic, Colombia’s economic growth was a record 10.6% in 2017. The government predicts that the economy will grow by 5% in 2019.