News Brief No. 00/55

News Brief: IMF's Aninat Welcomes Mexico's Financial Strengthening Program 2000-2001

July 11, 2000

The Mexican authorities announced on July 10 a "Financial Strengthening Program 2000-2001" with the aim of ensuring an orderly economic transition for the new administration. A key objective of the program is to further strengthen Mexico's ability to deal with potential volatility in international financial markets, in particular by reducing the external debt-service burden for the incoming administration. As part of this objective the program includes the following elements:

• Reaffirmation that Mexico's current IMF-supported economic program will be treated as precautionary. This means that Mexico will request the remaining financial resources available under the program only in case of extreme volatility and turmoil in the international financial markets.

• Consideration of early repayment of outstanding liabilities to the Fund.

• Renewal and extension of external financing from other official and multilateral financial institutions.

Commenting on Mexico's Financial Strengthening Program, IMF Deputy Managing Director, Mr. Eduardo Aninat, said:

"The IMF welcomes Mexico's Financial Strengthening Program as a means of ensuring a smooth economic transition for the new administration. The IMF supports Mexico's intention to treat the current Fund-supported program as precautionary, and to consider early repayment of outstanding liabilities to the IMF. Both are evidence of the solid performance of the Mexican economy over the last several years, which is a direct result of the firm pursuit of sound economic policies by the Mexican government. We also welcome the authorities' commitment to maintain close relations with the Fund.

"We would like to congratulate the Mexican authorities for the smooth manner in which the July elections were conducted, and in which the transition is being handled. These actions send positive signals to the international community by underscoring the continuing development of democratic institutions in Mexico," Mr. Aninat said.