Moody’s Sees Mexico Prepared for External Shocks

08/02/2016 The Wall Street Journal

6732357797_64d2ba3cdc_mMEXICO CITY—Mexican economic growth faces headwinds from global market volatility, government spending cuts and higher local interest rates, although the country is fairly well equipped to handle shocks such as lower oil prices and higher U.S. interest rates, Moody’s Investors Service said Wednesday.

“Gross capital flows to emerging markets have started to revert in 2016; although the trend change has been gradual in the case of Mexico, external volatility continues to weigh on growth,” the ratings company said in a report.

A flexible exchange rate, foreign reserves around $177 billion and a recently renewed flexible credit line with the International Monetary Fund leave Mexico relatively well positioned to manage external shocks, Moody’s added.

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