Mexico to receive $4 bn from IMF to bolster reserves

Mexico City, Aug 29 (EFE) Mexico will receive some $4 billion in special drawing rights, or SDRs, from the International Monetary Fund to bolster its reserves and liquidity, the country’s central bank said.

Banco de Mexico said the funds are part of some $250 billion in payments approved for IMF members countries at an April G-20 meeting to inject more liquidity into the global financial system.

The central bank also said a special IMF allocation of some $33 billion would be made available to the 185 member countries; the allocation will be proportionate to the countries’ relative size in the global economy.

It noted that Mexico will receive the $4 billion sum in two installments, the larger of the two on Friday and the second Sep 9.

The SDR is an interest-bearing IMF international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves. Its value is based on a basket of key international currencies that includes the dollar, the euro, the British pound and the yen.

Banco de Mexico said the SDRs are not related to a $47 billion line of credit that Mexico received from the IMF in April.

According to the IMF, an SDR allocation is a low cost way for its members to build their reserves without having to rely on more expensive domestic or external debt.