Business Notes FINANCE

Mexico has long been a model debtor, keeping current on its interest payments to foreign banks. Even in the face of 20% unemployment, it has stuck to an austerity program that has slashed the country's inflation rate from 15.5% a month in January to less than 1% in September. Luck, however, has not been on the government's side, and the recent plunge in the price of oil, Mexico's principal export, threatens to create a new financial crisis and political unrest.

Last week, following a quick round of negotiations between the U.S. and Mexican officials, Washington announced an emergency $3.5 billion loan to Mexico, the biggest such relief package since the Latin American debt problem arose in 1982. The short-term credit is designed to tide Mexico over until the end of 1988, when it expects to receive new loans from the World Bank and the International Monetary Fund.