Press Release No. 13/474

Press Release: IMF Executive Board Completes Review of Mexico’s Performance under the Flexible Credit Line

November 26, 2013

On November 25, 2013, the Executive Board of the International Monetary Fund (IMF) completed its review of Mexico’s qualification for the arrangement under the Flexible Credit Line (FCL) and reaffirmed Mexico’s continued qualification to access FCL resources. The Mexican authorities have indicated that they intend to continue treating the arrangement as precautionary.

The two-year FCL arrangement for Mexico in an amount equivalent to SDR 47.292 billion (about US$73 billion¹) was approved by the IMF’s Executive Board on November 30, 2012 (see Press Release No. 12/465). Mexico’s first FCL arrangement was approved on April 17, 2009 (see Press Release No. 09/130), and was renewed on March 25, 2010 (see Press Release No. 10/114) and January 10, 2011 (see Press Release No. 11/4).

Following the Executive Board discussion on Mexico, Mr. David Lipton, First Deputy Managing Director and Acting Chair, made the following statement:

“Mexico continues to have in place strong policy frameworks aimed at maintaining prudent macroeconomic policies and fostering long-term potential growth. Fiscal policy is governed by a fiscal responsibility law; monetary policy operates under a credible inflation targeting framework with a firm commitment to exchange rate flexibility; financial oversight is sound; and the macroprudential framework contains maturity and currency mismatches in the banking system.

“The government has also made impressive strides in advancing structural reforms to upgrade education, increase labor market flexibility, and foster competition in telecommunications. The congress has modified the fiscal framework, reformed the main taxes, introduced a universal pension and unemployment insurance, and is discussing energy sector and financial markets reforms.

“Mexico’s economic performance has been resilient to global volatility. The current policy mix and exchange rate flexibility are consistent with macroeconomic stability and a return to faster economic growth in the period ahead.

“The country’s close ties with the global economy are a source of strength but heighten the economy’s exposure to external risks. The arrangement under the Fund’s FCL, which the authorities are treating as precautionary, will continue to play an important role in supporting the authorities’ macroeconomic strategy by providing insurance against global downside risks and bolstering market confidence. The authorities will continue to assess global conditions and intend to take further steps toward exit from FCL support when those global conditions allow.”

¹ Amount based on the Special Drawing Right (SDR) quote of November 30, 2012 of 1 USD = SDR 0.652