, WASHINGTON, Mar 26 – The International Monetary Fund has approved a $48 billion successor credit line for Mexico, though it stressed it did not expect the line to be drawn on.
The one-year arrangement falls under the IMF\’s Flexible Credit Line, a scheme established last year to throw a cash lifeline to countries hit by the global economic crisis.
The new credit arrangement is a successor line to a $47 billion line extended to Mexico by the IMF last year.
John Lipsky, acting chairman of the IMF\’s executive board, praised Mexico\’s "sustained record of sound economic policies" and "very strong economic fundamentals and frameworks."
"On the back of these strong policy measures and improving global economic conditions, growth has resumed since mid-2009," he said in a statement.
"Nonetheless, sizeable downside risks still confront the global economy. It is against this background that, at the authorities\’ request, the Executive Board today approved a one-year arrangement under the IMF’s FCL, which the authorities intend to treat as precautionary.
"This successor FCL arrangement will continue to play an important role in supporting the authorities\’ overall macroeconomic strategy and in bolstering confidence until external conditions improve, complementing financing from other multilaterals."
Lipsky said the FCL credit line would provide "additional insurance" that would help "put Mexico in a very strong position to deal with other potential risks that could arise in the period ahead as the global economy continues to gradually recover from the crisis."