[ad_1]
CITY OF MEXICO (Expansion) –
The post-electoral process and public insecurity were two of the main concerns of some members of the Board of Directors of Banco de México (Banxico) for the The economy of the country, according to the minutes of their last meeting held before the elections of July 1 and published this Thursday.
"Among the risk factors, the majority indicated (…) the uncertainty associated with the renegotiation of NAFTA and the electoral and post-election process", according to the report of the June 21 meeting in which the central bank unanimously increased its benchmark interest rate to a rate of 7.75%, its highest level for nearly a decade.
The post-election process and the uncertainty of NAFTA can lead to the deferral of investments or a reduction in consumer spending, one of the engines of the country's economic growth, has explained Banxico in his minutes. s.
As early as the night of July 1, the country's presidential candidate, Andrés Manuel López Obrador, launched an economic message in which he emphasized his respect for autonomy and freedom of enterprise from Banxico. Even, the tabasqueño held in those days a meeting with the company leader, which he described as trust. Even the businessmen congratulated the winner in a video and call this moment "honeymoon".
Variables such as the peso / dollar exchange rate reacted with the profits of López Obrador to communicate that he will seek orderly management of public finances, support and continuity in the renegotiation of the Agreement North American Free Trade Agreement (NAFTA) and collaboration with businessmen.
Comment: Is the dollar cycle again elected in Mexico?
The majority also sees possible repercussions on economic activity due to the uncertainty of the electoral process, institutional weakness and public delinquency, and the fact that there is no such thing as an economic crisis. insecurity.
It points out that for one of the members of the Board of Insecurity it has "intensified" even in Mexico City with what we can assume that it is not a geographically isolated problem. Another argued that increasing public insecurity had already affected the country's productive activity.
Lee: The armor of trucks increases by 20% in the year due to insecurity
The day before, Hiram Almeida Estrada resigned from his position as head of the Secretariat of Public Security of the City of Mexico to July 31
The 10 sentences of the meeting between AMLO and businessmen
Inflation
All members of the Board of Directors of Banxico have agreed that the risk of inflation has risen presenting a slower convergence rate to its target of 3%, according to the bill.
"Some members have specified that even inflation might not reach the goal of 3% in 2019," according to the document, which publishes for the first time the vote of each member during the session.
After a peak of nearly 17 years in December, annual inflation began to fall.
Most board members also pointed out that inflation could be affected by the impact of the exchange rate, the strength of the dollar, the level of interest rates outside, l & # 39; Uncertainty surrounding the renegotiation of the North American Free Trade Agreement (NAFTA) and the electoral process in Mexico
"Some pointed out that there is still a risk of continuing to cope with the pressures on the upside or to cope with shocks in agricultural commodity prices, some have mentioned the risk of changing the policy of smoothing gasoline prices, and one pointed out that this could lead to greater volatility and volatility. a different seasonality than inflation, "says the report.
Everyone warned that monetary policy was facing a worst-case scenario and greater uncertainty. a monetary policy response is essential to avoid a disengagement of inflation expectations and second-rate effects, according to the bill.
Source link
