LatinNews Daily - 17 November 2023

* The International Monetary Fund (IMF)’s executive board has approved a new US$35bn two-year arrangement for Mexico under its flexible credit line (FCL) arrangement, which is designed for crisis prevention. According to Mexico’s central bank (Banxico), the FCL is a security instrument that strengthens Mexico’s international assets reserves and therefore complements the tools of the Mexican authorities to face adverse external conditions and preserve economic and financial stability. An IMF statement explains that “Mexico qualifies for the FCL by virtue of its very strong economic fundamentals and institutional policy frameworks and track record of macroeconomic performance and policy implementation.” It noted that policies have remained prudent, with monetary and fiscal policy focusing on containing inflationary pressures and keeping public debt in check respectively. The IMF highlighted that supply-side reforms were needed to address “existing bottlenecks”, such as combating climate change, addressing corruption, and improving the labour market. The IMF added that Mexico continues to face potential external risks, including “renewed volatility in the financial markets” and “weaker US growth” as well as uncertainty generated by upcoming elections in Mexico and the US.