10/17/2018 – Wall Street Journal
The U.S. is boosting the size of a credit line available to Mexico in times of need, part of a largely symbolic display of close ties as the countries prepare to sign a new version of the North American Free Trade Agreement.
U.S. Treasury Department officials said Wednesday they would triple the size of a credit facility known as the exchange stabilization agreement, potentially allowing Mexico to borrow up to $9 billion, compared with $3 billion under a previous agreement when the original Nafta came into force. Mexico also has a $3 billion line with the U.S. Federal Reserve that isn’t expected to change.
The size of the credit program, which comes in the form of a temporary swap line, is small compared with Mexico’s economy. Mexico already has a so-called flexible credit line of up to $87 billion with the International Monetary Fund that hasn’t been used. Mexico has previously drawn on the Treasury credit program in the aftermath of its economic crisis known as the Tequila Crisis in the 1990s. Treasury officials say there is no current indication that emergency funding is needed in Mexico, which has $173 billion in foreign-currency reserves.
Mexican President-elect Andres Manuel Lopez Obrador said Wednesday that U.S. President Donald Trump informed him he won’t be coming to his Dec. 1 inauguration and will be sending Vice President Mike Pence instead.
