Mexico Looks To Pay Down Debt, a rebuke to IMF

While other countries are racking up huge amounts of debt in order to get their countries’ growth back on track, Mexico is going against the grain. Mexicos President AMLO said his country will look to pay down its external Debt in a break from the IMF suggestions of spending its way into growth.

President Mexico said it’s important to lower Mexico’s current debt for future generations. Noting that some states have mishandled their funds and have left their states in heavy Debt. as is the case in Michoacán.

AMLO also noted that in the past, the IMF would dictate Mexico’s Economic policy, stating during the morning press meeting, Those days are over.

IMF Suggestions to Mexico: Mexico should implement larger near-term fiscal support to alleviate economic distress. The Washington-based IMF proposed tax reform to support spending in the medium-term. The Mexican government has resisted raising taxes, although it has made efforts to increase tax collection and enforcement.

Mexico is considering using a $12 Billion IMF Windfall to Pay Debt. A move that has helped Mexico’s bond rating but has also caused pushback from Bank of Mexico board members, outright rejecting the idea.

Bank of Mexico board member Gerardo Esquivel disregarded Lopez Obrador’s proposal.

Gerardo Esquivel went on to say In Mexico, by law, international reserve assets cannot be used to pay the debt,” Esquivel wrote on Twitter.

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