The two-year Flexible Credit Line (FCL) is the 10th such agreement between Mexico and the IMF since 2009, and is designed to help countries with strong economic fundamentals stave off crises, the IMF announced in a statement.

The Mexican authorities intend to continue to treat the arrangement as precautionary, according to the IMF.

The Fund recently announced that it expects the Mexican economy to grow by 3.2 percent in 2023, before slowing somewhat to 2.1 percent next year.

"The Mexican economy is in the midst of a broad-based expansion, with robust private consumption and investment," IMF Board Acting Chair Gita Gopinath said a statement announcing the new agreement.

But she warned that Mexico still faces a number of threats, including "risks of renewed volatility in the financial markets, increased risk premia, and capital outflows from emerging markets, as well as weaker US growth and a global slowdown."

The upcoming US and Mexican elections could further exacerbate uncertainty, she added.

"The new arrangement under the FCL will continue to play an important role in supporting the authorities' macroeconomic strategy and provide insurance against tail risks while bolstering market confidence," she said.