When the spectacular devaluation of the peso occurred at the end of 1994, 91-day swap lines of credit of $3 billion each-dollars for pesos-were available to the Bank of Mexico at the Federal Reserve and the Treasury's Exchange Stabilization Fund (ESF). These were known as regular swap lines. The first response on January 2, 1995, of the authorities to Mexico's crisis was to establish in addition temporary swap lines, initially of $1.5 billion at the Fed and the ESF, on February 1 increased to $3 billion at the Fed, but not at the ESF.
On January 31, 1995, President Clinton announced that the ESF would provide a $20 billion line of credit, less any outstanding drawings on the short-term facilities, that would be available for medium-term swaps and government securities guarantees between the Mexican government and the ESF.
I report on transactions during the past year first at the short-term and then at the medium term facility. I also discuss Mexico's total indebtedness to official agencies and the private market, and I offer some observations about Mexico's dependence on the United States for financial succor over the past 60 years. I conclude with comments on the FOMC's discussion in March 1990 of foreign exchange market intervention and warehousing of ESF foreign currencies.
