Mexico has told foreign bank creditors that it expects to sign a letter of intent for a crucial credit agreement with the International Monetary Fund soon, banking sources said today.
The government of outgoing President Jose Lopez Portillo is negotiating a loan of about $4 billion from the fund as the cornerstone of its attempts to solve the country's economic crisis. After signature of a letter of intent, the agreement would go to the IMF's governing board for approval.
Mexico's foreign debt director, Angel Gurria, has told French bankers during a current tour of European financial centers that the letter of intent would be signed by the end of this month or early in November, setting the conditions for the rescheduling of Mexico's crushing $78 billion debt, sources said.
But other sources cautioned that an agreement may not be close at hand.
The IMF is expected to wait until a new Mexican government takes office in December before giving final approval to an agreement.
According to banking sources, Gurria said signing the letter would trigger the release to Mexico of more than $1 billion of credit already agreed to by major world central banks.
Central banks, acting through the Bank for International Settlements in Basel, put together a $1.85 billion loan as part of an emergency package arranged for Mexico after its cash crisis came to a head in August. But only one-third of the loan has been disbursed so far, banking sources said.