The International Monetary Fund's executive board approved a $50 billion credit line for Mexico, reducing the amount it extended in previous years because it argues that the nation's economic prospects have improved.
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The two-year flexible credit line, designed for crisis prevention, is Mexico's ninth consecutive agreement and is about 20% less than the amount approved under the previous arrangement with the Fund in 2019.
The Mexican economy is rebounding from its deepest recession in decades, boosted by strong U.S. growth and rising vaccination rates, according to Geoffrey Okamoto, IMF's first deputy managing director and acting chair. The authorities have maintained external, financial, and fiscal stability despite the pandemic-related challenges. Mexico was the first country in the world to get a credit line when it was created in 2009 during the global financial crisis, and has voluntarily slowed its access in the last several years. Bloomberg reported earlier on the possibility of a reduction of the credit line from the current amount of $63 billion.
The flexible credit line is a form of pre-approved lending and comes with no conditions on how the money is spent. The FCL has been used by the IMF over the past decade to build a safety net under some of the most stable economies in Latin America, one of the world's hardest hit by the Pandemic last year.
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