Colombia seeking large IMF loan, but no decision expected in coming weeks, sources say

Nov 9 (Reuters) - Colombia is seeking a large lending arrangement with the International Monetary Fund, but no decision is expected in coming weeks, sources ​familiar with the talks said on Monday.

Bloomberg reported earlier that ‌the Andean country was negotiating for a $15 billion stand-by arrangement with the IMF.

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The IMF had no immediate comment on the report.

One of the sources ​reached by Reuters said the amount could be somewhat lower ​than $15 billion, adding that no decision had been made. ⁠A second source said the discussions were ongoing, with no immediate ​agreement in sight.

Reuters reported early last month that Colombia could seek between $8 ​billion and $20 billion in assistance.

Current and former officials noted at the time that the IMF instrument best suited to Colombia's circumstances would be the Precautionary ​and Liquidity Line, a facility designed for countries with sound economic ​fundamentals and institutional frameworks but that face vulnerabilities.

Colombia's government has projected a fiscal ‌deficit ⁠of 7.2% of its gross domestic product this year and a record 9.4% of GDP next year. It has Special Drawing Rights equivalent to roughly $2.78 billion, allowing it to access about $16.6 billion over the ​lifetime of the ​SDR agreement.

An ⁠IMF official subsequently said Colombia urgently needed to start a fiscal consolidation, noting that the IMF was ​working closely with Colombian officials.

While the nation meets ​most of ⁠the criteria for a PLL, including a sound financial system, strong monetary policy framework and central bank independence, it would need to demonstrate ⁠progress on ​the fiscal sustainability of its debt ​to qualify. Repeated budget overruns have eroded confidence in its policy framework.

Reporting by Andrea Shalal ​in Washington and Rodrigo Ramirez in Mexico City; Editing by Stephen Coates