History
Mexico joined the International Monetary Fund (IMF) on December 31, 1945, a year after the inception of the IMF in 1994. As of 2022, Mexico has 11816.7 million Special Drawing Rights(SDR's,) and a SDR quota of 8912.7 Million. The leading director of Mexico on the IMF Executive Board is Pablo Moreno, with Alfonso Guerra, and Jose Andres Romero serving as alternatives. Mexico's current governor is Rogelio Eduardo Ramirez de la O with Victoria Rodriguez Ceja serving as an alternative. As of 2022, Mexico holds 90,586 votes totaling 1.80% of total voting shares in the IMF. Mexico has the second greatest number of votes in Latin America.
As of 2022, Mexico has had 18 numbers of arraignment with the IMF since its membership in 1945.
Mexico in 1948
Mexico recorded the largest trade balance deficit in the years 1946 and 1947, as a result of mass consumption during World War 2, causing Banco de Mexico to practically lose all their accumulated reserves during the war. As a result, in July 1948, Mexico informed the IMF that it could no longer maintain the par value of the peso that was established without further financial support. Seeking financial assistance from both the IMF and the United States, mixed responses from both parties were received. The United States, decided that before agreeing to Mexico's request, the IMF would have to decide if the peso's par value was rational under the their current circumstances. IMF executive board members doubted that the par value of the peso was reasonable, and whether it could be maintained. Following lack of IMF willingness to assist Mexico, the Bank of Mexico chose to float the peso up until June 1949, when Mexico established a new par value for the peso.
1982 Mexican Debt Crisis
Mexico suffered from a massive debt crisis in 1982, resulting in the country requesting emergency financing from the IMF. Despite an early period of economic success, a decline in oil prices and an increase in US interest rates caused Mexico to double its debt from 1979 to 1982 causing an excess inflation rate of nearly 60% of its GDP. Recognizing Mexico's state of economic panic, secretary of finance Jesus Silva Herzog advised former IMF acting manager William Dale to send a mission to Mexico, in attempts to reach a solution. Negotiations began in August 1982 in order to secure appropriate funding assistance. However, on August 11, Mexico's commercial bank creditors no longer rolled over principle payments that were due on August 16, creating further economic difficulties for Mexico. As a result, Herzog flew to Washington in order to meet with newly appointed IMF managing director Jacques de Larosière on August 13, 1982. IMF support was promised on the condition that Mexico find a solution to avoid further defaults on future debt payments.
Mexico successfully avoided future defaults on debt payments due to $7 billion of American aid that consisted of payments for advanced oil exports, and credit guarantees from both US Department of Agriculture and the Treasury Department's Exchange Stabilization Fund. The Bank for International Settlements also provided $1.85 billion, giving Mexico the short term funding in order to avoid becoming default. The programs and conditions that applied to the Mexican debt crisis lasted for three years. As a result of IMF involvement in Mexico following its economic crisis, many believe this marked the IMF's role of international crisis manager in Latin America.
Prior to the 1982 debt crisis, Mexico enjoyed a period of economic stability. This changed in 1976, when a change of president and an alteration of fiscal policy led to a recession. This led to the country being granted an economic stabilization program through the IMF, one of the first programs of this nature to be installed in Mexico by the IMF.