* IMF says to quickly approve $20.5 bln credit line
* Zloty gains 2.1 pct vs euro in the session
* Analysts say credit line a financial buffer
(Adds deputy finance minister's comment)
By Pawel Sobczak and Kuba Jaworowski
WARSAW, April 14 (Reuters) - Poland is set to tap the International Monetary Fund's (IMF) flexible credit line for $20.5 billion, joining Mexico in a programme designed to encourage countries to act proactively to combat the financial crisis.
Finance Minister Jacek Rostowski said on Tuesday that Poland would soon ask for the credit line and IMF chief Dominique Strauss-Kahn said he expected the fund to move quickly with an approval. [nWAR008169]
Later on Tuesday his deputy said the country may get the credit line as soon as next week.
"This in an instrument, thanks to which we are getting priceless insurance policy in the time of a global uncertainty," Deputy Finance Minister Ludwik Kotecki told Reuters.
The announcement helped the Polish zloty which jumped 2.1
percent against the euro
Polish 5-year credit default swap, a measure of investors' expectations of a likelihood of a sovereign default, stood at 215.4 basis points, down from its 220.5 bps Thursday close and in line with the rest of the region.
"Poland's government will soon file to the International Monetary Fund for the flexible credit line," Rostowski told a news conference. "This will increase national bank reserves by about a third."
The European Union's largest ex-communist member, Poland is in better shape than the region's other emerging economies, such as Hungary, Latvia and Romania -- all of which have received outside funds.
It has previously been reluctant to flag any need for additional funding, even though it suffered from an evaporation of capital due the credit crunch and worries over the region's growth and financing.
"Poland has a sustained record of sound economic policies," the IMF's Strauss-Kahn said in a statement released on the fund's website.
"Its economic fundamentals and policy framework are strong, and the Polish authorities have demonstrated a commitment to maintaining this solid record."
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Economists said the new credit line did not carry the black mark associated with IMF assistance in earlier crises and should help Poland in the long run.
"This is good news for investors because it gives the finance ministry a safety buffer in terms of financing," said Marta Petka-Zagajewska, economist at Raiffeisen in Warsaw.
Poland's government has some 150 billion zlotys of debt to refinance in 2009 and some analysts had earlier voiced fears the credit crunch may put strong upward pressure on the yields offered by the country of 38 million.
Central bank Monetary Policy Council member Halina Wasilewska-Trenkner told Reuters the credit line should help stabilise the Polish currency, which has gained 16 percent against the euro in the last two months following a steep retreat.
Analysts said Tuesday's current account data, which surprised with 525 million euros surplus against an expected 568 million euros gap, would also be supportive for the zloty.
At 1450 GMT the euro traded at 4.2580 zlotys.
The boost to IMF funds agreed at this month's meeting of G20 leaders is also aimed at addressing any shortfall on the capital needed to bolster growth and confidence in the region's emerging markets. (Additional reporting: Sebastian Tong and Pawel Sobczak, writing by Chris Borowski; editing by Chris Pizzey/Jason Neely/ Victoria Main)