Experts to explain bank take-over

Press, 4 September 1982, Page 9

Experts to explain bank take-over

NZPA Mexico City Two Mexican Foreign Ministry economic experts will visit Western Europe next week to explain to Governments there the reasons behind Mexico’s nationalisation of private banks and the imposition, of exchange trols.A Foreign Ministry spokesman said that the Deputy under-Secretary for Economic Affairs (Mr Jorge Navarrette) and the Deputy under-Secretary for Multilateral Affairs' (Mr Manuel Tello) would visit France, Britain, West Germany, and Switzerland. Leaders of Mexico’s governing Revolutionary Institutional Party called for a rally today to support the Government's sweeping' monetary reforms aimed at halting the flight of capital abroad. The Government has nationalised domestic banks and ordered their closure until Monday, imposed foreign exchange controls, and declared the United States dollar illegal tender. Weekly-paid workers face the prospects of not being paid because of the closure of the banks, and appeared resigned to an austere weekend. Despite the sweeping measures, probably the most drastic since the expropriation of foreign oil companies

in 1938. there were no reports of unrest. The Defence Minister (General Felix Galvan), in an apparent attempt to scotch any rumours of a coup, told President Jose Lopez Portillo yesterday that the Armed Forces would remain loyal to the Government, its institutions and democracy. Meanwhile, monetary sources in Toronto say that the International Monetary Fund, labouring to provide aid for Mexico, will press foreign banks to continue to make credit available to the country. Some fund strategists have expressed concern that when the international lending agency begins to make funds available to Mexico, potentially vulnerable commercial banks might reduce or cut off their lines of credit. The sources said that had happened during some previous fund lending programmes and they believed that if it happened again in Mexico it could worsen an already serious economic situation. The Fund expects to have a SUS4.S to ?5 billion in aid for Mexico completed by the end of October. Many of the details of the loan are being put together by fund officials who have arrived in Toronto for the four-day annual 1.M.F.-World Bank -meeting next week.