Mexico to Present New Debt Proposals to IMF

Mexico will present “solid” new financial proposals to the International Monetary Fund in Washington today, including plans to link debt payments to oil earnings, Mexico’s new finance minister said Wednesday.

A revised financial and economic program was approved by President Miguel de la Madrid in a Cabinet session Wednesday, Finance Ministry spokesmen confirmed. The program will be the basis of a letter of intent formally requesting a new IMF standby loan, Finance Minister Gustavo Petricioli said Wednesday a meeting with foreign reporters.

Petricioli, who was scheduled to arrive in Washington late Wednesday night, will meet with U.S. Federal Reserve Chairman Paul A. Volcker Friday morning. He also will see Treasury Secretary James A. Baker III during his visit.

Mexico needs financial aid to meet some $1.5 billion in interest and principal payments that are due Monday, Petricioli warned. Mexico’s ability to meet its June debt-servicing bill “will depend on what happens with our negotiations this week,” he said.

Mexico’s proposals center on its insistence that it must achieve 3% to 4% economic growth in 1987 and that its budget deficit targets and foreign credit requirements should be adjusted according to changes in its oil income, Petricioli said.

Since the beginning of the year, Mexico has been seeking a standby loan from the IMF of about $1.3 billion. The IMF’s central economic condition is that Mexico reduce its expanding budget deficit, now expected to reach at least 13% of gross domestic product this year, up from 10% in 1985.