IMF Approves Expanded Flexible Credit Line for Mexico Michael O'Boyle - Reuters
go to original May 28, 2016

The International Monetary Fund on Friday boosted its flexible credit line with Mexico to $88 billion in a bid to support Latin America's No. 2 economy, whose currency has been battered by global volatility.

The fund said it canceled a previous flexible credit line, which was for $67 billion and approved on November 26, 2014. The new credit line will last for two years, the fund said.

Mexico's macroeconomic policies "remain very strong," but there are risks given global market volatility, David Lipton, IMF First Deputy Managing Director and Acting Chair said in a statement.

Mexico's peso was little changed following the announcement.

"The new arrangement under the Flexible Credit Line (FCL), with a higher level of access, will continue to play an important role in supporting the authorities' macroeconomic strategy by providing insurance against greater external risks and bolstering market confidence," he said.

A collapse in oil prices has crimped the flow of dollars into the central bank's coffers from crude sales by state oil company Pemex, undermining its main tool of reserve accumulation. The bank does not project building reserves this year.

See the original at Yahoo News

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