WASHINGTON - THE International Monetary Fund said on Wednesday it approved a 'precautionary' credit line of US$20.58 billion (S$30 billion) to help Poland boost its reserves and weather the global economic crisis.

The arrangement for Poland is the second IMF commitment after Mexico under the Fund's so called flexible credit line created in March to help nations cope with the current financial turmoil that had slammed the brakes on growth.

'The Polish authorities intend to treat the arrangement as precautionary, which means that they do not intend to draw' from the credit line, an IMF statement said.

Mr John Lipsky, first deputy managing director, said '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'.

He said exports had contracted and economic activity had slowed in early 2009, reflecting a deep recession in its main trading partners.

'A sharp slowdown in credit growth is underway as banks have begun to tighten credit criteria. Nonetheless, Poland has maintained access to international capital markets,' he said.

Mr Lipsky said that Polish authorities had responded 'in a timely and effective manner' to the global downturn. -- AFP