The International Monetary Fund's executive board approved a 20.6-billion-dollar credit line for Poland on today to help the country weather the effects of a deep global recession, dpa reported. Polish officials asked for the one-year loan as a precaution and will not necessarily need to access the funds if the economic situation stabilizes. The funds were approved under a new flexible credit line, which the IMF created earlier this year for countries with typically strong fiscal policies that have been struck by the economic downturn. Mexico has already taken a loan and Colombia is also in talks. Eastern European countries have been especially hard hit by a financial crisis that has decimated the assets of the region's banks, many of which are heavily dependent on Western European parents that dabbled in the now defunct US mortgage market. The loan comes without the IMF's often stringent restrictions on a government's fiscal policies, and IMF officials praised the Polish authorities' handling of the economic downturn so far. "Despite very strong fundamentals, Poland's economy is now facing the risk of spillovers from the global crisis through both the real and financial sector channels," said the IMF's deputy managing director, John Lipsky. "The executive board considered that a precautionary arrangement ... for Poland would play an important role in supporting the authorities' policy response, boosting market confidence, and placing Poland in a better position to manage adverse developments," Lipsky said. World leaders have promised a massive expansion of the IMF's role in the current economic crisis, pledging to triple its lending budget to 750 billion dollars.
