Banxico defends economic solidity of Mexico in the face of uncertainty for Trump • Economics and Finance • Forbes Mexico

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The Bank of Mexico (Banxico) defended the macroeconomic solidity of the country as a shield against the commercial tensions derived with the new administration of President Donald Trump.

In the minute of their most recent February meeting released on Thursday, the members of the Central Bank Governing Board agreed that the Mexican economy has solid foundations to face external risks, despite uncertainty due to possible tariffs and changes in the Migration policies.

The members stressed that Mexico has a balance of sustainable payments, an adequate level of international reserves and a flexible exchange rate regime, factors that act as shock absorbers against external shocks.

Among the members, the minute stressed that one “added as elements of the macroeconomic framework the strength of the banking system, given its proper liquidity and capitalization, and the solidity of the finance that will be reinforced with the fiscal consolidation provided by 2025”.

According to the document, during the February 6 meeting, the members recognized that Mexican financial markets experienced volatility after the announcement of new US tariffs, although they highlighted the rapid recovery of the Mexican weight after the agreement to pause these measures.

“(The members of the Governing Board) recalled that said regime allows to absorb in an orderly manner the clashes facing the national economy,” says the note.

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Despite the volatility of the exchange market and the yields of government bonds, Banxico said that the premiums for sovereign risk have remained stable and that capital flows to the local fixed income market continue to show resilience.

Among the comments, the document emphasizes that one of the subgovernors of Banxico “said that the country stands out among emerging economies for the strength of its macroeconomic framework.”

Although the members recognized the uncertainty generated by Trump’s commercial and migratory policies since January 20, they trusted that the Mexican economy will raffle these challenges without significantly affecting their stability.

In this sense, a member considered that the uncertainty for possible commercial taxes of Trump “should not cloud the vision or lead to hasty decisions, but that a clear approach must be maintained and continue to adopt measures that are consistent with the convergence of inflation to the goal ”.

On monetary policy, Banxico reaffirmed his commitment to a “prudent and vigilant” position, although he foresaw a second cut of 50 consecutive base points.

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The recent reduction in the interest rate in 50 base points, to 9.5%, was interpreted by most members as an opportunity to support economic recovery without risking financial stability.

In this sense, Banxico emphasized that he will continue to monitor global economic developments, staying prepared to adjust his monetary policy position if external conditions require it.

With EFE information

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