Poland no longer needs IMF credit line

The central bank said it could instead provide the IMF with a loan to “help other countries overcome the effects of the global crisis.“

WARSAW, March 29, 2010 (AFP) - Poland's economy is stable and no longer needs its 21.8-billion dollar (16.2-billion euro) credit line from the International Monetary Fund, the Polish central bank said on Monday.

"The situation with the Polish economy and the financial system is sufficiently good ... that it is not necessary to ask the IMF for a further extension of the flexible credit line," the bank said in a statement.

The central bank said it could instead provide the IMF with a loan to "help other countries overcome the effects of the global crisis."

The finance ministry, however, insisted it still wanted to have a reserve at hand if the economy ran into fresh headwinds.

"We are expecting a good deal of shocks in the coming months ... There is still a necessity to ensure that Poland has a supplementary reserve," Deputy Finance Minister Dominik Radziwill said in a statement.

The credit line for Poland was approved in May 2009 and extended for six months in November 2009. It was intended to reassure investors and allow Poland to access credit easily if it needed it, which ultimately it did not.

The announcement came during a visit to Warsaw by the head of the IMF, Dominique Strauss-Kahn.

Poland was the only member of the 27-nation European Union to have experienced growth in 2009 and the IMF this month forecast that its economy will expand by 2.75 percent this year and by 3.25 percent in 2011.

Poland is a former communist-ruled country that joined the EU in 2004.

The IMF introduced the new system of flexible credit lines in 2009 as a safeguard against external shocks during the global economic crisis. Poland and Mexico both secured credit lines under this scheme whilst other countries needed loan arrangements.