The debt-ridden Mexican government has received $1 billion from the United States for speeded-up oil payments and another $1 billion from the U.S. Export-Import Bank to buy grain and other food in the United States, Mexican Finance Minister Jesus Silva Herzog announced in an unprecedented speech to the nation Tuesday night.
He also announced that Mexico has entered urgent discussions with the International Monetary Fund, the central banks of the major industrial nations and a number of commercial banks in an attempt to shore up and refinance its staggering economy. He further said that new foreign exchange rules would take effect on Thursday.
In Washington, Treasury Secretary Donald Regan confirmed that the United States has agreed to speed up oil payments to Mexico and has extended $1 billion in food credits, United Press International reported.
Regan said he could not give details, "except to confirm we have agreed to step up payments for future purchases of oil and we have agreed to give them $1 billion in CCC (Commodity Credit Corp.) credits toward purchase of agricultural products from the United States.
"We are very sympathetic to their plight," Regan said. "We are very happy to hear that they're going into the IMF, and we will be talking to them further about how not only ourselves but the international monetary system can be helpful to them in tiding them over this crisis."
Mexico also is negotiating for a $1.5 billion line of credit, mainly from the central banks of "West Germany, Italy, France, England, Canada, Switzerland, the United States, Japan and other industrial countries," said Silva Herzog.
Within a few days, there will be additional negotiations with the world's principal commercial banks for the "volunatry restructuring" of Mexico's public and private debt, essentially extending scheduled short-term payments into medium-term ones, Silva Herzog said.
[In Basel, Switzerland, sources at the Bank for International Settlements said the institution had granted at least part of a $1.5 billion line of credit sought by Mexico, the Associated Press reported.]
[Starting Thursday, a three-tiered system will go into operation. There will be preferential rates for some businesses, a second special rate for dollar accounts in Mexican banks, and a floating rate for the general public.]
[According to financial analysts, the practical results of the exchange system mean:]
[* Anyone holding U.S. currency will be able to exchange dollars and checks for pesos at prevailing free-market exchange rates.]
[* Foreign banks, firms, embassies and certain individuals with dollars on deposit here will be able to withdraw pesos at a sliding rate that will vary according to government regulations.]
* Unnamed essential imports and persons paying off previous peso debts before the Aug. 5 devaluation will obtain a preferential rate, the AP reported.