IMF Executive Board Completes Review of Mexico’s Performance under the Flexible Credit Line Arrangement
November 20, 2020
- The IMF completed its standard mid-term review of Mexico’s qualification under the Flexible Credit Line (FCL), which was originally approved on November 22, 2019 with an access level of about US$61 billion.
- Mexico continues to qualify for the FCL by virtue of its very strong fundamentals and institutional policy frameworks and track record of economic performance and policy implementation.
- The arrangement has bolstered confidence through the ongoing global pandemic and, combined with the comfortable level of international reserves and access to bilateral swap facilities, provides insurance against downside risks. The authorities intend to continue to treat the arrangement as precautionary.
On November 18, 2020, 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 affirmed Mexico’s
continued qualification to access FCL resources. The current two-year FCL
arrangement for Mexico in an amount equivalent to SDR 44.5635 billion
(about US$61 billion) was approved by the IMF’s Executive Board on November
22, 2019 (see
Press Release No. 19/431
). The Mexican authorities stated their intention to treat the arrangement
Following the Executive Board’s discussion on Mexico, Mr. Geoffrey Okamoto,
First Deputy Managing Director and Acting Chair, made the following
“Mexico has been buffeted by an extraordinary confluence
of shocks from the COVID-19 pandemic, with a heavy toll on the Mexican
people. The economy has nonetheless demonstrated resilience owing to its
very strong policies and institutional policy frameworks, including a
flexible exchange rate regime, a credible inflation targeting framework, a
fiscal responsibility law, and a well-regulated financial sector.
“The Mexican economy remains exposed to external risks, including a global
resurgence of the outbreak which could result in diminished external
demand, a delay in the recovery of tourism, and a fall in oil prices.
International tensions over health supplies, premature withdrawal of policy
support in advanced economies, and lingering trade disputes could further
disrupt market sentiment. The Flexible Credit Line (FCL) will continue to
play an important role in supporting the authorities’ macroeconomic
strategy by providing insurance against tail risks and bolstering market
“The authorities have a track record of sound policy management and are
firmly committed to maintaining prudent policies going forward. They intend
to continue to treat the arrangement as precautionary. Owing to the
heightened external risks associated with the pandemic, the authorities
have paused their planned path of reductions in access levels. They have
affirmed their intention not to make permanent use of the FCL and, as
external risks facing Mexico recede, to resume their planned path to exit
from the facility.”
Amount based on the Special Drawing Right (SDR) quote at the time
of the approval on November 22, 2019 of 1 USD=SDR0.726187.
IMF Communications Department
PRESS OFFICER: Raphael Anspach
Phone: +1 202 623-7100Email: MEDIA@IMF.org