Mexico Seeks IMF Line Extension

Mexico plans to renew its $48bn flexible credit line with the IMF, the multilateral says. Despite Mexico employing sound economic policies, which have led to signs of recovery, “uncertainties remain in the global environment,” says John Lipsky, IMF deputy MD. In response to the credit crisis, the IMF launched the FCL in March 2009 to replace its short-term liquidity facility, calling it an insurance policy for strong performers that can be fully disbursed as needed, rather than conditional on compliance with policy targets. Mexico’s FCL, the first under the program, features a repayment period of 3.25-5.00 years and the line can be renewed. It pays fees of 15bp for drawing up to 200% of quota, 30bp for 200%-1,000%, and 60bp beyond that.