The Bank of Mexico said it offered a $10 billion bilateral loan to the International Monetary Fund as part of the international effort to bolster the multilateral financial institution's reserves.
The loan is being extended as part of the agreements reached at the G20 Summit in Los Cabos, where President Felipe Calderon announced that Mexico would take part in the international effort to strengthen the IMF's ability to respond to financial crises, the Mexican central bank said.
A total of 37 IMF members are contributing to the effort to help stabilize the global economy and promote growth, the Bank of Mexico said.
"The joint effort by member countries assures the availability of at least $456 billion in additional resources via bilateral lines of credit," the central bank said.
The lines of credit will be available to the IMF "once it utilizes the majority of the resources at its disposal, which are principally contributions of capital that different countries have made to said organization," the Bank of Mexico said.
The central bank said the IMF would use the additional resources to deal with the needs of all countries and not just one region.
"In this context, via a bilateral lending agreement, the Bank of Mexico will make available to the IMF up to $10 billion, resources that the aforementioned institution will be able to use during the next two years. Said term can be extended for another two years," the central bank said in a statement.
If the loan is made, it will only represent a modification of the international assets in the central bank's investment portfolio, the Bank of Mexico said.
"In the event that the IMF requires said funds, they will continue to be reported as Mexico's international reserves," the central bank said.
The investment in the IMF is a safe asset that is, "in fact, superior" to other assets that qualify as international reserves, the Bank of Mexico said.
"It is important to note that Mexico could have immediate access to these resources, so that this financing will not affect the freedom to act of the country's financial authorities," the central bank said.
The loan is not an increase in Mexico's IMF contribution but "an investment decision in the international assets portfolio of the central bank itself," the Bank of Mexico said.
Mexico has benefited more than once from international assistance provided via the IMF, the central bank said.
"In fact, said institution has currently extended a flexible line of credit of approximately $72 billion to Mexico, which complements the Bank of Mexico's foreign reserves," the central bank said. EFE