Political Risk Latin America Blog @PolRiskLatam

IMF Managing Director Dominique Strauss-Kahn Welcomes Mexico’s Request to Expand Flexible Credit Line to US$73 Billion

Posted in News and Articles, Political Risk by politicalrisklatam on December 14, 2010

International Monetary Fund, Press Release No. 10/490, December 14th, 2010.

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), made the following statement today in Mexico City:

“I welcome the Mexican authorities’ indication, underscored by President Felipe Calderón this morning, that Mexico is interested in taking advantage of the recent reforms to the Fund’s Flexible Credit Line (FCL) facility to replace its existing one-year, SDR 31.5 billion (about US$47 billion, equivalent to 1,000 percent of quota) precautionary FCL arrangement with a two-year precautionary FCL arrangement in the amount of SDR 47 billion (about US$73 billion, or 1,500 percent of quota).

“Over the past decade and a half, Mexico has put in place very strong policy frameworks, including inflation targeting, a flexible exchange rate regime and a balanced budget rule, while important fiscal reforms have been passed. In addition, public and private balance sheets have been substantially strengthened while a robust financial sector supervisory and regulatory framework has been put in place.

“While Mexico was significantly affected by the global financial crisis, the authorities responded resolutely and effectively, and a recovery is now underway. Nonetheless, important uncertainties remain in the global environment, and I share the authorities’ view that the longer duration and higher access available under the reformed FCL can play an important role in continuing to support Mexico’s policy strategy and in maintaining external confidence. I therefore intend to move ahead rapidly in seeking approval by the Fund’s Executive Board of Mexico’s request.” (continue reading… )

 

 

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