The measure being taken by the Federal Reserve (FED) to deal with inflation has not only brought consequences to the US economy, it has also had an impact on its southern neighbor, Mexico.
The Mexican currency, the peso, has been strengthened by the actions undertaken by the FED, the currency of the neighboring country to the south is quoted, on average, 19.75 pesos per dollar, according to Banco de México.
This figure is positive for the Mexican economy, since a few months ago its currency was above 20 pesos per dollar. With the movement of the FED, the currency gained 1.17% against the reference price.
In an economic analysis in ‘El Financiero,’ Carlos Serrano Herrera indicated that the peso is strong because Mexico has a stronger fiscal position than most emerging countries.
“The total debt of the Mexican public sector is around 50% of GDP , which is lower than in other emerging countries that have the same credit rating as ours”, he said.
Ignacio Ibarra, economist at the Tec de Monterrey campus Puebla, indicated, in a publication of the informative blog of the institution, that “raising the interest rate by the Bank of Mexico in response to the actions of the Federal Reserve of the United States, is a measure that helps the stability of the peso against the dollar.”
Although the economic context in Mexico is different from that in the United States, Ba Bank of Mexico is evaluating emulating the measures of the FED to also counteract the inflation that is being experienced.
In this sense, Ibarra pointed out that “the data on the different currencies show that Banxico (Banco de México ) has more room for maneuver to move the rate and, in any case, hold dollar auctions if required.”
For this reason, the Mexican central bank will hold its penultimate policy meeting next week monetary policy of the year, according to the most recent survey among economists carried out by the financial group Citibanamex, the hike will be defined.
It is estimated that those involved will approve an increase of 75 basis points in the cost of loans, this includes mortgage issues and banking, so citizens must be aware of what will happen and its impact in these areas.
The economist pointed out that the rises in interest rates in the country can also be seen as a sign of what ue Mexico does not want to lose economic competitiveness against the United States, for this reason Banxico, as far as possible, adapts to the strategies put into action by the FED.
The Mexican economy has struggled with inflation, this has affected the sectors of goods and services in a general way, but the measures undertaken by Banco de México have managed to contain the increase in prices.
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