Mexican economic team says inflation expectations 'well anchored'

Record ID: 79677

  • Title: Mexican economic team says inflation expectations 'well anchored'
  • Date: 9th November 2016
  • Summary: MEXICO CITY, MEXICO (NOVEMBER 9, 2016) (REUTERS) ****WARNING CONTAINS FLASH PHOTOGRAPHY*** MEXICAN FINANCE MINISTER, JOSE MEADE (LEFT), AND MEXICO MEXICAN CENTRAL BANK HEAD, AGUSTIN CARSTENS (RIGHT) ENTERING NEWS CONFERENCE JOURNALISTS GENERAL OF NEWS CONFERENCE (SOUNDBITE) (Spanish) MEXICAN FINANCE MINISTER, JOSE MEADE, SAYING: "We will be especially vigilant of the evolution of financial markets. The government and the Bank of Mexico will take the necessary measures in a coordinated manner with the objective of keeping an adequate functioning of the markets. In this context, the exchange commission will be pending the analysis of the behaviour of the markets and will make the necessary decisions to avoid erratic movement of exchange rates that bring about undesirable balances." JOURNALISTS GENERAL OF NEWS CONFERENCE (SOUNDBITE) (Spanish) MEXICAN CENTRAL BANK HEAD, AGUSTIN CARSTENS, SAYING: "(The Bank of Mexico) will look at the situation and will make the monetary policy decisions that the government considers pertinent to meet its priority mandate of keeping inflation low and stable. I remind you that the government will meet to consider monetary considerations next week." MEADE AND CARSTENS SHAKING HANDS AT CLOSE OF NEWS CONFERENCE
  • Embargoed: 24th November 2016 14:40
  • Keywords: Mexico economy U.S. election reaction peso
  • Location: MEXICO CITY, MEXICO
  • City: MEXICO CITY, MEXICO
  • Country: Mexico
  • Topics: Government/Politics,Elections/Voting
  • Reuters ID: LVA00157Q66H3
  • Aspect Ratio: 16:9
  • Story Text: Mexico's Finance Minister Jose Meade and central bank head Agustin Carstens looked to calm markets on Wednesday (November 9) after Republican Donald Trump's surprise victory over Democratic rival Hillary Clinton for the U.S. presidency sparked a massive selloff tanking the peso up to 13 percent in after-hours trading.
    The peso pulled back to trade around 8.5 percent weaker at 19.88 per dollar early on Wednesday, ahead of the joint news conference between Meade and Carstens.
    "We will be especially vigilant of the evolution of financial markets. The government and the Bank of Mexico will take the necessary measures in a coordinated manner with the objective of keeping the adequate functioning of the markets. In this context, the exchange commission will be pending the analysis of the behaviour of the markets and will make the necessary decisions to avoid erratic movement of exchange rates that bring about undesirable balances," Meade said.
    Trump's threats to rip up a free trade agreement with Mexico and to tax money sent home by migrants to pay for building a wall on the southern U.S. border have made the peso particularly vulnerable to events in the race for the White House.
    The central bank chief mostly backed up Meade as the pair looked to calm markets.
    "(The Bank of Mexico) will look at the situation and will make the monetary policy decisions that the government considers pertinent to meet its priority mandate of keeping inflation low and stable. I remind you that the government will meet to consider monetary considerations next week," Carstens said.
    Carstens last week said Mexico was prepared for an "adverse" result in the U.S. election, which he has said could hit the country like a "hurricane."
    Mexico has more than $175 billion dollar in foreign reserves, and Carstens said last month he would consider using a $90 billion dollar International Monetary Fund flexible credit line "in the event of an external shock."
    The central bank has already raised its rate three times this year, lifting it to 4.75 percent to anchor inflation expectations following a sharp depreciation of the peso.
    Trump's win caught the market off guard. The peso rallied nearly 1.4 percent on Tuesday before official election results began to be released as the market bet Clinton would win.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2016. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register