(Bloomberg) – The board of directors of the International Monetary Fund has approved a $ 50 billion line of credit for Mexico, reducing the amount it has provided in previous years because it argues that the country’s economic outlook have improved.
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The two-year flexible line of credit, designed for crisis prevention, is Mexico’s ninth consecutive agreement and is about 20% less than the amount approved under the previous agreement with the Fund in 2019.
“The Mexican economy is recovering from its deepest recession in decades, spurred by strong US growth and rising vaccination rates,” said Geoffrey Okamoto, first deputy managing director and acting chairman of the IMF, in a statement. communicated. “The authorities have succeeded in maintaining external, financial and fiscal stability, despite the challenges associated with the pandemic. “
Mexico was the first country in the world to obtain the line of credit when it was established in 2009 during the global financial crisis and has voluntarily reduced its access in recent years. Bloomberg earlier reported the possible reduction in the line of credit from the current amount of around $ 63 billion.
Read more: Mexico, IMF plan to cut $ 63 billion line of credit as risks ease
Flexible Line of Credit is a form of pre-approved loan and has no strings attached to how the money is spent. The IMF has used the FCL over the past decade to create a safety net in some of the most stable economies in Latin America, one of the regions of the world hardest hit by the pandemic last year.
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