News Brief No. 95/3

News Brief: IMF to Start Negotiations with Mexico Next Week on Stand-by Credit

January 6, 1995

Michel Camdessus, the Managing Director of the International Fund, said in Washington today after meeting Mr. Guillermo Ortiz, Secretary of Finance of Mexico that the IMF will start discussions with the Mexican authorities on financial assistance to support the Government's economic program:

"Mr. Ortiz has requested financial assistance from the IMF to support Mexico's economic program. As in the past, we shall be glad to assist the country in its stabilization and reform efforts in whatever way we can.

"Mr. Ortiz detailed the economic policies announced earlier this week by the Mexican government, which are aimed at stabilizing the economy, restoring market confidence, and deepening structural reform. The principal goals of the program are the containment of inflation and the reduction in the external current account deficit. The program is centered on a further strengthening of the public finances, a correspondingly restrictive monetary policy, and avoiding a wage-price spiral. The authorities have also announced the expansion of their privatization program to promote faster economic growth and social development.

"These policies provide a solid basis for discussions on an agreement that could be supported by the use of IMF resources. Accordingly, an IMF team will travel to Mexico next week to start negotiations on a stand-by credit," Camdessus said.