Carstens Sees Slower Mexico Inflation as Gasoline Gains Ease

09/30/14 Bloomberg

finance-market_dataMexico’s central bank has done a “good job” in helping guide the economy and the inflation rate will probably near its 3 percent target toward the middle of next year, Governor Agustin Carstens said. A change in the way gasoline prices are fixed will help curb the rise in broader consumer costs, Carstens said in an interview with El Financiero-Bloomberg TV, according to a transcript. Favorable comparisons with inflation this year, when the nation implemented a tax increase, will also help lower the annual rate starting in January, he said. Stable inflation expectations have allowed policy makers to lower interest rates to boost the economy in the absence of pressures on core inflation, which excludes farm and energy costs, Carstens said. Policy makers cut borrowing costs 1.5 percentage points in a 15-month period to 3 percent, the lowest in Latin America, to revive an economy that struggled to bounce back from its weakest expansion since 2009.

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Volatility likely in Mexico with rising U.S. rates: Carstens

09/30/14 Reuters

finance-market_dataA gradual rise in interest rates in the United States is likely to generate some market volatility in Mexico, but the fundamentals of Latin America’s no. 2 economy are sound, Mexican central bank governor Agustin Carstens was quoted as saying on Tuesday. “At the end of the day, the increase in interest rates will lead to a readjustment of portfolios, which in this readjustment process could cause volatility,” Carstens told Mexican financial daily El Financiero in an interview. “Certainly we’re going to have a certain amount of volatility, nevertheless … the macroeconomic fundamentals in Mexico are good,” he added.

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Public spending, U.S. recovery to help Mexico in 2014 – Carstens

Agustin_CarstensReuters, 12/3/2013

Mexico should ramp up public spending in the first months of 2014 and its economy is also likely to receive help from improving conditions in the United States, central bank governor Agustin Carstens was quoted as saying on Tuesday.

Mexico’s economy is performing at its weakest since 2009, with analysts polled by the central bank expecting it to post growth of around 1.3 percent this year.

In an interview with newspaper El Universal, Carstens reiterated the bank’s view that economic expansion was likely to pick up to around 3 percent to 4 percent next year, as the United States’ recovery gathers strength, lifting Mexico’s exports.

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Economists dial down projections for Mexico’s growth

Los Angeles Times, 10/1/2013

finance-market_dataStorms and insecurity are further eroding once-optimistic predictions for Mexico’s economic growth, analysts say. Mexico’s economy contracted in the second quarter for the first time in four years. The growth rate is more likely about 1.7%, the government says, or half the prediction of just 10 months ago — and a little less than half of last year’s pace. Some private economists put the current rate even lower.

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Analysis: Mexico peso rise tests central bank’s hands-off stance

Pesos by Flickr user AleiexChicago Tribune, 3/14/2013

Mexico’s peso is scaling new highs amid confidence in the country’s reform push, a likely credit ratings upgrade and profit taking after last week’s interest rate cut, sparking speculation about how far it will rise before authorities act. The peso has gained 2.6 percent since the start of the month, the best performance of the 152 currencies tracked by Thomson Reuters, and broken through key levels of 12.50 per dollar for the first time in 18 months.

The rise has come despite a 50 basis point cut in benchmark interest rates to a record low 4 percent on Friday, which only served to fuel investor optimism about the outlook for Latin America’s No. 2 economy.

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Tax Revamp Under Pena Nieto Outweighs CPI Impact, Carstens Says

Bloomberg, 11/6/2012


Mexican central bank Governor Agustin Carstens said that the benefits of a fiscal overhaul raising taxes, as Mexico’s incoming president is expected to propose, would outweigh any short-term inflation increase.

“What we know about tax reforms worldwide, when they are implemented they have a once-and-for-all impact on CPI, but then the effect on inflation gets diluted,” Carstens said yesterday in an interview in Mexico City following the conclusion of Group of 20 meetings. Carstens said increasing government revenue would provide “a much stronger basis for stronger growth” and help limit inflation in the “medium and long term.”

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Mexico bank chief risks unnerving investors

Financial Times, 2/2/2010

The new head of Mexico’s central bank has promised closer co-operation with the government will underpin his six-year tenure, a move likely to heighten investor concerns about his institution’s independence.

Agustín Carstens, who took over as Bank of Mexico governor at the start of this year, told the Financial Times in an interview there was “huge scope for constructive interaction” with the centre-right administration of Felipe Calderón, president.

Such comments risk unnerving investors, who fear his close links to Mr Calderón could make the bank more susceptible to political pressure.

Mr Carstens said investor concerns were unfounded. “There is no reason to worry; the only thing that both the president and the Banco de Mexico under my leadership are trying to do is to exploit those synergies that are possible.”

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