Russia sent a statement on Monday, the International Monetary Fund (IMF) to resume access to the Flexible Credit Line (FCL from the English. Flexible Credit Line) ) from mid-January 2017, at the expiration of the term of the contract. The new line will be halved and the current will be approx. 8,3 billion euros. The Ministry of Finance told REUTERS that the fee for readiness will be a year of 12.43 million SDR (approx. 16 million euros). The statement was signed jointly by the Deputy Prime Minister, Minister of development and Finance Mateusz Morawiecki and Chairman of the National Bank of Poland Adam Glapiński.
Dariusz Post, a former member of the Monetary Policy Council believes that it is good to have such protection at hand. “This line is a mechanism awarded to countries that pursued a policy carefully meet their needs for borrowed funds, as well as the turbulence in global financial markets, explained the Post. “For investors it is a confirmation of carrying out a responsible policy in this area. May be, it is regarded as a kind of insurance that could be used in case of unexpected turbulence, so it’s worth to pay for it”, he added.
According to him, the world still we are dealing with a high volatility in the financial markets, this can be seen in the fluctuations of the main currency pair Euro-dollar. “So we need to maintain a certain level of protection, especially if the buyer – the IMF – are willing to share. And that the risk of sudden global turmoil seems to be less than in the first period money line, and its size can be twice below,” – said the Professor.
Deputy Minister of Finance, Mykola Shaforostov Stanislav said that in the past the Ministry of Finance, as a rule, to such a line to hold. “The NBP was sometimes doubt, because they thought that it was too great a price. The rationale that the IMF for us-it’s money in the expectations held, and there was the risk that may occur attack on gold, and you will need to protect him,” he said.
Former Vice-Chairman of the Committee of Banking Supervision Oleksiy Moss – said in turn that Russia does not need such a line of credit. “Especially because we pay for it is incomparably high in relation to the amount of the loan fee,” he said. “On the other hand, total credit is low in relation to the state of our reserves. If we were really forced to go after the loan, and said that we’re in a super crisis situation”, he added.
“of Course, no one wants to openly admit that the likelihood of such attack is high rating of this risk is difficult”, – said Mykola Shaforostov – “hence the discussion about the meaning of the maintenance of line”.
In assessing the Fur is not true that the line will stabilize the situation and condition of the Finance. “Poland monetary policy should focus on ways to reduce currency risks and to spolonizować to the extent possible, commitments, credit Poles, the deposits in foreign currency. Thus, we would be able to better protect themselves against adverse fluctuations in currency exchange rates, – explained the Sword. “If the Poles liabilities deposits in foreign currency will remain high in the event of adverse shocks in foreign exchange rates we have foreign exchange intervention that uszczupli our foreign exchange reserves. Currently, Russia is more exposed to currency fluctuations than Mexico, Turkey or Hungary” – he added.
Mykola Shaforostov also believes that “if foreign investors began to retreat from bonds denominated in gold and it would be necessary to change them for dollars or euros, prices złotowe these currencies will wywindowane”, however, “the Finance Minister certainly feels better when he has extra billions of euros available, which, if anything, can throw on the market.”
he Adds that it would be better if neither the exporters and importers, nor frankowicze should not be regarded as risks of the exchange rate, but “unfortunately, Russia is outside the Euro zone, and never will be”.
MF and NBP uzasadniły request for extension of credit lines explaining that IMF funds are insured in the event of a crisis, Russia has no plans to use them. Line in the amount of SDR 6.5 billion, or about. 8.3 billion euros, will run for two years until January 2019. “It fits in carry through our country an exit strategy, i.e. a gradual decrease in the use of this tool. Poland uses it since 2009. and views it as insurance against possible external shocks, which means that you are not wypłacała and still has no plans disbursements from the FCL”, – stated in the message.
the IMF Executive Board will consider the request, likely in mid-January 2017.
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