Mexico Secures Funding Package To See It Through 2000 Election
MEXICO CITY -- The Mexican government will announce today an $11 billion financing package aimed at building confidence that the country can survive next year's presidential election without suffering an economic crisis.</br></br>The heart of the package, officials said, is a new $4.2 billion International Monetary Fund standby loan, to be disbursed over 18 months, that the fund's board is expected to approve shortly after recent lengthy negotiations. The package will also include commitments by the World Bank and the Inter-American Development Bank, some previously announced, as well as the longexpected renewal of an estimated $6.8 billion in swap lines with the U.S. Federal Reserve, the U.S. Treasury and Canada's central bank.</br></br>The swap arrangement dates back many years and was strengthened in the 1994 peso crisis when Canada and the U.S., Mexico's partners in the North American Free Trade Agreement, and commercial banks supported Mexico's faltering economy with $47 billion in emergency financing.</br></br>A Finance Ministry spokesman said late yesterday he couldn't confirm details.</br></br>An IMF official in Washington, however, confirmed that a deal had been struck and said the Mexicans would "probably" draw on the funds. Countries sometimes secure IMF lending agreements to calm financial markets, but don't actually draw on the money.