Mexico maintains high credentials that grant access to the Flexible Credit Line with IMF

The Executive Board of the International Monetary Fund (IMF) approved the Mexican government’s request to maintain the coverage of the facility open in the body that functions as insurance against capital outflows without changes. Despite the intention that the Treasury had expressed since 2019 to annually reduce the amount of coverage, it refers that “in the face of growing external risks” it prefers to keep the insured sum unchanged at 50,000 million dollars.

In the statement of the approved renewal, the deputy director of the Executive Board, Antoinette Sayeh, stressed that the escalation of world inflation and the tightening of financial conditions in a context of slowdown in the United States open up important challenges for the Mexican recovery that continues to advance after the pandemic.

After reviewing the country’s financial conditions, the IMF team of experts highlights that the Mexican economy remains resilient, relying on its solid policies and institutional frameworks that include the free floating of the peso, the credible inflation targeting strategy, the responsibility law tax and a well-regulated financial sector.

The mid-term review carried out by IMF experts is on the LCF approved in November 2021, it still has coverage for an additional year and the Mexican authorities keep it open on a precautionary basis.

Access to this facility is restricted to emerging economies that maintain strict management of public finances, financial and fiscal stability, as well as solid institutional frameworks. Only five members of the Fund have met the strict requirements to have this facility open since 2009: Mexico, Poland, Colombia, Chile and Peru. Poland canceled access to this facility in 2019 and Colombia It is the only country of the five that has used part of the dollars available in its account.