Finance minister Jacek Rostowski announced that Poland will apply to the International Monetary Fund to gain access to the so-called Flexible Credit Line - a new fund established last month to help strongly performing economies bolster their future performance. The main aim of the move is to increase National Bank reserves and thus help lower the cost of servicing the country's foreign debt.
The Flexible Credit Line (FCL) was established on 24 March along with a wider package of International Monetary Fund reforms. Unlike its standard loans, which provide assistance to countries on condition they implement certain economic reforms, the FCL is only available to states whose finances are considered to be in good order but which could benefit from further access to financing.
According to Finance Minister Jacek Rostowski Poland would benefit from the credit line by lowering its debt-servicing costs and limiting potential depreciation pressures on the zloty. The special credit line had only been offered to a limited number of countries and Poland would be the second country to access it after Mexico which made the move a few days ago. Analysts have endorsed the move saying it may reassure the international markets of the Polish government's capacity to maintain stable currency values.
Skeptics, however, say that the extra cash Poland will have at its disposal can make the country's currency prone to speculative attacks especially in view of Poland attempting to enter the ERM2 mechanism. It may also further increase the country's public debt. IMF managing director Dominique Strauss-Kahn said in a statement that he would seek a quick approval for the credit line from the fund's executive board.
Click on the audio icon to listen to the report by Danuta Isler.