Press Release No. 15/536

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

November 24, 2015

On November 23, 2015, 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 stated their intention 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$65 billion¹) was approved by the IMF’s Executive Board on November 26, 2014 (see Press Release No. 14/543). 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), January 10, 2011 (see Press Release No. 11/4), and November 30, 2012 (see Press Release No. 12/465).
November 24, 2015

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

“Mexico’s economy has shown resilience over the last year in a complex external environment characterized by falling commodity prices and heightened global financial market volatility. Moderate growth continues, inflation is close to target, and the external current account deficit is contained. Despite the increased volatility, foreign exchange and sovereign debt markets have continued to function well.

“This resilience reflects Mexico’s track record of prudent macroeconomic policies in the context of a strong policy framework. Looking ahead, the authorities have reaffirmed their commitment to proceed with fiscal consolidation to lower the public debt-to-GDP ratio, and to rebuild foreign exchange reserves. The implementation of a broad range of structural reforms is expected to raise medium-term growth.

“Mexico’s integration with the global economy is a source of strength but also increases its exposure to external shocks. The Flexible Credit Line arrangement, for which Mexico continues to meet the qualification requirements, will play an important role in supporting the authorities’ macroeconomic strategy by providing insurance against tail risks and supporting market confidence. The Mexican authorities continue to treat the arrangement as precautionary and have stated their intention to phase out access in any subsequent FCL arrangement conditional on a reduction in global risks affecting Mexico.”

¹ Amount based on the Special Drawing Right (SDR) quote of November 23, 2015 of 1 USD = SDR 0.726977