IMF Project that created problems for the nation that they helped
Carissa Nicholls
University Of The People
The project discussed is the IMF Mexico project in 1994. In 1994 The International Monetary Fund has approved an 18-month stand-by credit for Mexico about US$17.8 billion in support of the Government’s 1995-96 economic and financial program. “In the analysis of the causes of the Mexican peso crisis - and of its depth - consensus is emerging around a variety of factors. These include the large scale of the current account deficit, which had reached almost 8% of GDP in 1993 and 1994, as well as the fact that an important part of this deficit” (Stephany Griffith-Jones The United Nations University WIDER (World Institute for Development Economics Research) Causes and Lessons of the Mexican Peso Crisis. May 1997. Working Papers No. 132 page 1) “On 20 December the Mexican authorities widened the intervention limit for the peso by 15%. Because this led to such a massive outflow of funds (during 20 and 21 December foreign exchange reserves in Mexico fell by over US$4 billion) and reserves fell to fairly low levels, the peso was then allowed to float. Even though the Mexican authorities on 20 December did what many observers had said was necessary (a …show more content…
Therefore policymakers need, as a very important policy objective, to aim at avoiding such crises, as they are extremely costly to the domestic economy. Important lessons can be learnt (or re-learnt) from a careful analysis of the Mexican peso crisis, as well as from precious foreign exchange crises.”(Stephany Griffith-Jones The United Nations University WIDER (World Institute for Development Economics Research) Causes and Lessons of the Mexican Peso Crisis. May 1997. Working Papers No. 132 page
Carissa Nicholls
University Of The People
The project discussed is the IMF Mexico project in 1994. In 1994 The International Monetary Fund has approved an 18-month stand-by credit for Mexico about US$17.8 billion in support of the Government’s 1995-96 economic and financial program. “In the analysis of the causes of the Mexican peso crisis - and of its depth - consensus is emerging around a variety of factors. These include the large scale of the current account deficit, which had reached almost 8% of GDP in 1993 and 1994, as well as the fact that an important part of this deficit” (Stephany Griffith-Jones The United Nations University WIDER (World Institute for Development Economics Research) Causes and Lessons of the Mexican Peso Crisis. May 1997. Working Papers No. 132 page 1) “On 20 December the Mexican authorities widened the intervention limit for the peso by 15%. Because this led to such a massive outflow of funds (during 20 and 21 December foreign exchange reserves in Mexico fell by over US$4 billion) and reserves fell to fairly low levels, the peso was then allowed to float. Even though the Mexican authorities on 20 December did what many observers had said was necessary (a …show more content…
Therefore policymakers need, as a very important policy objective, to aim at avoiding such crises, as they are extremely costly to the domestic economy. Important lessons can be learnt (or re-learnt) from a careful analysis of the Mexican peso crisis, as well as from precious foreign exchange crises.”(Stephany Griffith-Jones The United Nations University WIDER (World Institute for Development Economics Research) Causes and Lessons of the Mexican Peso Crisis. May 1997. Working Papers No. 132 page