IMF to Lend Mexico $315 Million to Aid in Quake Recovery

The International Monetary Fund announced Friday that it will make a special $315-million loan to help Mexico with economic recovery from the earthquakes last September that severely damaged parts of Mexico City and other areas of the country.

The five-year loan at a favorable 7.87% interest rate is designed to help Mexico meet foreign exchange needs arising from the earthquakes, an IMF statement said. It estimated that Mexico’s current balance-of-payments accounts may have been adversely affected by as much as $700 million in 1985.

The quakes increased the need for imports while reducing income from tourism and curtailing exports other than petroleum, the statement noted. The worldwide slump in the price of oil, Mexico’s most lucrative export, has seriously cut Mexico’s income.

Mexico already owes the IMF more than $2.9 billion and has a foreign debt that totaled $96.4 billion last year. The IMF board discussed Mexico’s plight at its October meeting and reached a tentative decision in November to assist it with reconstruction, according to IMF spokesman Graham Newman. Details of the loan were worked out later, he said.