IMF approves credit limit of 35 billion dollars to Mexico

It was reported that the Board of Executive Directors of the International Monetary Fund (IMF) approved a 2-year flexible credit limit of $35 billion for Mexico.

The IMF statement indicated that Mexican officials intend to consider the new credit limit as a precautionary measure.

The statement stated that the approved flexible credit limit of $35 billion was designed to avoid a crisis for Mexico.

The statement indicated that Mexico was considered eligible for the credit limit thanks to its very strong economic fundamentals and institutional policy frameworks, its macroeconomic performance and its history of policy implementation, and that this was the tenth credit limit issued for Mexico since 2009.

IMF First Deputy Managing Director Gita Gopinath, whose views were included in the statement, stated that the Mexican economy is in the midst of broad-based growth with strong consumption and investment.

‘MEXICO IS STILL STRONG’

Gopinath stated that Mexico’s macroeconomic policies and institutional policy frameworks remain very strong, with a flexible exchange rate regime, a reliable inflation targeting framework, a fiscal responsibility law and a well-regulated financial sector.

Noting that Mexican officials’ policies remain prudent, Gopinath noted that while monetary policy focuses on controlling inflationary pressures, fiscal policy keeps public debt under control.

Gopinath noted that Mexico continues to be exposed to increasing external risks, although they are lower than in previous years, and affirmed that the new credit limit will continue to play an important role in supporting the macroeconomic strategy of the Mexican authorities and providing security against risks and to the at the same time increase market confidence. (AA)