PANAMA CITY (Reuters) - The International Monetary Fund (IMF) said on Tuesday it had approved a $2.7 billion line of credit for Panama to address the coronavirus pandemic.

The IMF’s executive board approved the two-year arrangement under its Precautionary and Liquidity Line (PLL) to serve as “insurance against extreme external shocks” that the pandemic’s economic fallout causes.

In determining the Central American country’s eligibility for PLL, the lender cited in a statement Panama’s “sound economic fundamentals, strong institutional policy frameworks, long track record of good economic performance and policy implementation.”

The line of credit will help support what the IMF described as an “adequate level of spending” on health care and other social programs designed to cushion the pandemic’s blow in Panama.

The press office of Panama’s economy and finance ministry did not immediately respond to a request for comment.

IMF Deputy Managing Director Mitsuhiro Furusawa, in the statement, praised the government’s pandemic containment efforts to date as well as its approval of deficit spending to ensure more funds reach healthcare services.__Reuters