The Mexican government expects to be able to resume issuing more long-term debt by the end of the year as credit markets return to normal, a senior finance ministry official said on Tuesday. Mexico announced on Monday it was temporarily cutting long-term debt issues and boosting short-term debt sales to meet a surge in demand for short-term paper and to provide liquidity to money markets.
The credit crunch has hit Mexico hard in recent weeks, forcing the central bank to scramble to pump liquidity into the financial system as short-term debt markets began to seize up and wrong-way bets against the dollar by local companies roiled currency markets.
Asked if Mexico was in talks with the International Monetary Fund for a line of credit, senior finance ministry official Gerardo Rodriguez said "we don't need it." Rodriguez, who oversees the government's debt program, told reporters at a briefing the government expected it would be able to increase issues of long-term debt and decrease issues of T-bills in the first quarter of 2009. The government announced on Monday it was cutting long-term debt issues to boost liquidity in the short-term debt market.
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