The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This Selected Issues paper analyzes reserve adequacy in Mexico. Reserve adequacy has been of renewed interest, as the authorities have introduced a new rules-based mechanism of U.S. dollar sales to reduce the rate of reserve accumulation. The paper examines the recent experience with Mexico's fiscal management tools in light of the need for further consolidation. It reviews evidence on the cyclical behavior of fiscal policy in Mexico, finding that it has generally been procyclical since the early 1990s. The paper also examines the determinants of inflation in Mexico since 1997.