History Mexico and the International Monetary Fund

1 history

1.1 1982 mexican debt crisis
1.2 1994 mexican peso crisis
1.3 2009 increased credit line
1.4 u.s. monetary policy normalization on mexico’s sovereign bond yields

history

mexico became member of international monetary fund on december 31st, 1945, 4 days after official establishment of imf. since 1945, has reached 8.912 billion special drawing rights (sdrs), 1.87% of total amount of sdrs imf. governor josé antonio meade kuribreña, , country holds 90,591 votes.

two financial arrangements approved 47.292 billion sdr each year in 2012 , 2014.

the latest financial agreement approved on may 26, 2016, 62.3889 billion sdrs approved. financial arrangement imf set last total of 2 years.

1982 mexican debt crisis

in august 1982, mexico 1 of first of various latin american countries default on foreign debt. result of this, imf approved 4 billion loan (in usd) mexican government. however, conditions applied worked reform mexican economy. programs , conditions applied mexican debt crisis lasted 3 years.

prior 1982 debt crisis, mexico enjoyed period of economic stability. changed in 1976, when change of president , alteration of fiscal policy led recession. led country being granted economic stabilization program through imf, 1 of first programs of nature installed in mexico imf .

1994 mexican peso crisis

in 1994, currency crisis in mexico resulted in devaluation of mexican peso, resulted in severe financial crisis. currency crisis has been said have been brought on new fiscal policies created government @ time. mexican peso crisis extremely severe. @ same time, major organizations such international monetary fund, world bank, , other major banks, such j.p. morgan, praised mexican economic reforms of time, claiming country s reforms effective in bettering economy.

in month of december, government changed presidents , cabinet, resulted in transformation of fiscal policy. within course of december 15th - december 21st, approximately 5.5 billion usd left country, , end of december, mexican peso s devaluation 35%. devaluation in matter of couple of weeks led interventions imf , other organizations affiliated group. in january 1995, imf entered scene , laid out 7.8 billion bailout package aid mexico in overcoming crisis. however, united states stepped in , increased rescue package 50 billion usd aid of private banks, imf, , bank international settlements.

2009 increased credit line

as of 2009, mexican government requested increase in credit line imf. approved imf in same year, increasing mexico s credit line $47 billion usd. notable feature increase is 1 of new arrangements under new imf lending reforms or flexible credit line. increase meant ensure mexico able prosper despite global financial crises, , program last solely year.

u.s. monetary policy normalization on mexico’s sovereign bond yields

the international monetary fund has published within spillovers u.s. monetary policy normalization on brazil , mexico’s sovereign bond yields (goes, c.; et al., 2017) using vector error-correction models, find u.s. 10-year bond yield key driver of long-term yields in these countries, , brazilian yields more sensitive u.s. shocks mexican yields during 2010–13. remarkably, propagation of shocks u.s. long-term yields amplified changes in policy rate in brazil, not in mexico. our counterfactual analysis suggests yields in both countries temporarily overshot values predicted model in aftermath of feds “tapering” announcement in may 2013. study suggests emerging markets need contend potential spillovers shifts in monetary policy expectations in u.s., lead higher government bond interest rates , bouts of volatility.