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Chile accepts IMF $3.5 billion credit line

(Adds central bank comments)

May 20 (Reuters) – Chile on Friday accepted a short-term liquidity line (SLL) from the International Monetary Fund (IMF) of around $3.5 billion, aiming to support the South American country’s economy as it rebounds from the COVID-19 pandemic.

Chilean authorities also notified the IMF that of their decision to exit the current two-year flexible credit line, which was set to expire at the end of the month.

The credit line has no conditionality and “provides predictable, revolving and renewable liquidity support in foreign exchange,” Chile’s mission chief to the IMF, Ana Corbacho, told reporters on Friday.

Chilean authorities plan to treat the renewable SLL as “precautionary,” the IMF said in a statement.

A robust vaccination campaign made the copper producing nation a global leader in the fight against COVID-19 and helped the country return to pre-pandemic output levels in 2021, Corbacho said.

In a statement, IMF Deputy Managing Director Bo Li credited the new credit line to Chile’s “very strong fundamentals and policy frameworks, and a sustained track record of implementing policies that have supported the country’s resilience in the face of large shocks.”

Chile’s central bank echoed the IMF in a statement, citing “the normalization of the exceptional measures implemented during the pandemic and the lower risks perceived in relation to the health emergency” as reasons to accept the SLL.

Chile’s interior ministry did not immediately respond to a request for comments. (Reporting by Peter Frontini, Carolina Pulice and Brendan O’Boyle; Editing by Sandra Maler and Bill Berkrot)

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