Mexico’s Exchange Commission, chaired by Treasury Minister Edgar Amador, announced that the International Monetary Fund (IMF) has renewed the country’s Flexible Credit Line (FCL) for two more years. The renewed line totals roughly US$24 billion (MX$440 billion), marking Mexico’s eleventh FCL arrangement since 2009.

The new amount reflects a reduction from the roughly US$35 billion in place since November 2023. Authorities noted the cut is part of a gradual strategy to scale down Mexico’s FCL access, which peaked at about US$88 billion in 2020–2021 during the COVID-19 pandemic.

IMF Endorsement and Economic Outlook

The IMF’s Executive Board determined that Mexico continues to meet all qualification criteria for the FCL, leading to the renewal of the financing line.

Nigel Clarke, Deputy Managing Director and interim Chair of the Executive Board on Mexico, noted that Mexico’s economic activity remains weak, constrained by necessary fiscal consolidation and a restrictive monetary policy. Furthermore, the economy is impacted by the negative effects of commercial tensions resulting from tariffs imposed by US President Donald Trump.

Despite these pressures, Clarke highlighted Mexico’s “resilience and stability amid increased external uncertainty,” supported by strong macroeconomic policies and institutional frameworks, including a flexible exchange rate, credible inflation-targeting regime, fiscal responsibility law, and a well-regulated financial sector.

The Ministry of Finance and Public Credit (SHCP) underscored that the FCL renewal acknowledges Mexico’s solid macroeconomic and institutional foundations, including sound public finances, a sustainable debt trajectory, and effective monetary and exchange rate policies.

Gradual Exit Strategy

The Exchange Commission requested a lower access level of 17.8254 billion Special Drawing Rights (SDRs), or roughly US$24 billion. The SHCP described the reduction as part of a “gradual and orderly exit strategy,” aligned with Mexico’s robust fundamentals and reduced vulnerability to capital flow reversals.

The FCL serves as a precautionary instrument that strengthens Mexico’s international reserves and enhances its ability to withstand external shocks. Mexico pays a commission for maintaining the credit line, with higher fees only if resources are drawn.

IMF Flags Weak Growth Outlook

In October, the IMF concluded its 2025 Article IV consultation for Mexico. It projects real GDP growth to slow to 1.0% in 2025 due to fiscal tightening, restrictive monetary policy, and persistent trade uncertainty affecting investment and consumption. Growth is expected to recover to about 1.5% in 2026. Headline inflation continues to ease, with the IMF forecasting convergence toward the central bank’s 3% target by the second half of 2026.