BdeM does not exclude further rate increases

Reuters
Photo: Guillermo Sologuren
The Mayan Voyage

Mexico City
Friday, June 29, 2018

The Bank of Mexico (BdeM) Must Continue with a Monetary Policy Approach Javier Guzmán Calafell a points out that the risk balance for inflation in Mexico tends to rise in the current environment, said one of the institution's vice governors on Thursday. According to the text of an article presented in London, it would be necessary to exclude other adjustments of the reference interest rate

Guzmán adds that at the end of the electoral process of July 1, it will be necessary to know the economic policy measures that will be taken by the government. new government, especially in public finances.

The peso's appreciated by 2.24% on Thursday and reached its best level in a month during a volatile session, after comments from the deputy governor of BdeM, in that the agency is ready to raise its interest rate, and only a few days before the presidential elections, positioning itself as the currency having made the most progress on the foreign exchange market.

In wholesale operations, the Mexican currency recovered 45 cents to close at 19.72 for a dollar, according to the closing price published by the Bank of Mexico. In retail operations, the peso rose by 2.43% – between 50 and 45 cents – so every dollar was sold to the general public at 20 pesos, according to Citibanamex's end-of-session price.

The penultimate trading day preceding Sunday's election, the peso recorded its best price since May 28, when it closed at 19,599 units, according to the balance sheet of the central bank.

Early this week BdeM's operations and payment systems, Jaime Cortina, indicated that they were not expecting a market upheaval or a depreciation of the peso in case the candidate on the left won the presidency, the markets having already assimilated this possibility

. However, other risk factors persist for the price of the peso against the dollar, particularly the growing trade protectionism of the United States and the threat of new tariffs that could be applied to exports. s of the automotive sector, Banco Base said in a report.