MEXICO CITY (Reuters) -The International Monetary Fund's executive board has approved a two-year, $35 billion flexible credit line for Mexico, it said in a statement on Thursday, noting the Latin American country's economy is undergoing a broad-based expansion.
The Mexican authorities stated their intention to treat the new arrangement as precautionary and are set on maintaining prudent policy going forward, the statement added.
This is Mexico's tenth flexible credit line arrangement since 2009, and the country has reduced amounts of the lines granted in recent years, the IMF said.
In 2017, the IMF granted Mexico a credit line worth around $88 billion, which by 2021 was reduced to $50 billion.
"Mexico's macroeconomic policies and institutional policy frameworks remain very strong," Gita Gopinath, the IMF's First Deputy Managing Director, said in the statement.
Mexico does remain exposed to elevated external tail risks, however, Gopinath said, including "renewed volatility in the financial markets, increased risk premia, and capital outflows from emerging markets, as well as weaker U.S. growth and a global slowdown."
Authorities will reassess the external risk outlook and their implications on access under the agreement in November 2024, the IMF added.