Mexican President Miguel de la Madrid, in a pretaped television interview, said today that current negotiations with the nation's creditors are aimed at "adjusting" the debt payments to Mexico's ability to pay.
The interview was broadcast the day after U.S. Federal Reserve Board Chairman Paul A. Volcker quietly met with government leaders here amid growing concern about Mexico's ability to deal with its $98 billion foreign debt. The country has been negotiating with the International Monetary Fund since last fall on a new agreement that would clear the way for a cash infusion from its lenders.
Meanwhile, the Mexican peso, which slumped more than 20 percent last week, rebounded today. Private exchange houses were quoting the peso at between 635 and 640 to the dollar after it had fallen to 730 on Monday from about 520 a week ago. The more important, government-controlled rate, which accounts for some 80 percent of foreign exchange dealing, was trading at about 547 to the dollar, unchanged from Monday, Reuters reported.
Volcker visited here yesterday for unannounced talks with Finance Minister Jesus Silva Herzog, U.S. and Mexican officials said. Neither U.S. nor Mexican officials divulged the substance of their conversation and Volcker left later in the day without commenting. But banking sources pointed out that Volcker has been involved before in working out compromises between Mexico and its creditors.
There was growing speculation here that Mexico was considering a partial suspension of payments on its debt. But since taking over in 1982, de la Madrid has made cooperation with the IMF and Mexico's mostly U.S. private creditor banks a hallmark of his administration.
He avoided a direct response when asked in the television interview whether he would order a halt to the payments. But he did nothing to dampen speculation.
As he did again today, de la Madrid has been saying with increasing clarity in recent months that Mexico has reached the limits of its ability to pay. His tone has become more urgent as oil prices fall, cutting into the country's main foreign exchange earner and complicating an already serious economic crisis.
Mexico depended on oil sales for 70 percent of its foreign exchange earnings last year. The sum represented between 40 and 50 percent of total government income.
As a result, the drop in oil prices from more than $25 to as low as $12 a barrel has cost Mexico 30 percent of its foreign exchange earnings and more than 12 percent of overall government income, de la Madrid said.
"This fall in export products has been an enormous problem for us in the management of our economy," he added.
De la Madrid also emphasized his desire to avoid retracting the Mexican economy further to meet austerity guidelines sought by IMF officials in exchange for more loan extensions. Instead, he said he would like to see expansion by next year.
This has been at the center of Mexican negotiations with the IMF, particularly with respect to government budget deficits. The IMF previously sought to impose a deficit limit of about 5 percent. Economists here have predicted that the deficit for 1986 could be double that.
Some diplomatic sources suggested the growing talk here about defaulting could be an attempt to raise the temperature on the latest round of negotiations for new IMF loans, due to take place this week. Mexican talks with the IMF, on whose outcome new loans from private U.S. banks also depend, have entered a critical phase in which de la Madrid needs all the leverage he can get, these sources pointed out.
Foreign Secretary Bernardo Sepulveda, in an appearance before a conference in San Diego, Calif., complained yesterday that the Reagan administration has not given "a proper answer" to de la Madrid's recent assertions that the debt has become a political problem requiring political, rather than financial, solutions