Mexico Wants to Join BRIC IMF Bond Scheme

Mexico’s central bank reportedly intends to buy IMF bonds, following similar announcements by China, India and Brazil. While some may question this use of dwindling reserves at a time when the economy is under such severe pressure, analysts say it is a good idea. Alfredo Thorne, MD of economic and policy research at JPMorgan, says that doing so would allow the central bank to reduce exposure to the US dollar in favor of more stable IMF special drawing rights. He adds that he has heard Mexico might purchase $25bn in the bonds, versus Brazil’s $10bn bid. The country’s reserves total $75bn, versus Brazil’s roughly $200bn. Walter Molano, an analyst with BCP, says that by acquiring IMF bonds, Mexico – as well as the other countries interested in doing the same – can have more say in how the fund operates.