U.S. election outcome could alter next Mexico rate move: Carstens

10/4/16 Reuters

380px-Agustin_CarstensMexico’s central bank may not follow any impending interest rate increase by the U.S. Federal Reserve if the outcome of the U.S. presidential election is seen as favorable to Mexico, the bank’s Governor Agustin Carstens said on Tuesday.

Asked on local television whether Mexico would seek to follow a rate hike by the Fed, Carstens referred to the November election, speaking just a few days after the Mexican central bank raised its benchmark interest rate by 50 basis points.

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Bank of Mexico Raises Rates to Contain Inflation

9/29/2016 The Wall Street Journal

pesomexicanoMEXICO CITY—The Bank of Mexico raised interest rates by a half percentage point Thursday, making good the expectations of most economists, in a bid to contain inflation and bolster a peso hovering near record-low levels.

The central bank led by Agustín Carstens increased the overnight rate to 4.75%. But the bank sought to reassure investors that the half-percentage-point rate increase won’t necessarily be repeated at the next meeting, saying that “it isn’t the start of a tightening cycle.”

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Carstens Reiterates Mexico May Not Have to Wait for Fed Hike

8/28/2015 Bloomberg Business

banco de mexicoMexico central bank Governor Agustin Carstens reiterated that policy makers haven’t ruled out raising interest rates before the U.S. if they sense peso weakness creating conditions that could spur faster inflation.

“We have said that we are not 100 percent locked into the idea that before we move the Fed has to move,” Carstens said in an interview with Bloomberg Radio at the Kansas City Federal Reserve’s annual retreat in Jackson Hole, Wyoming. “We have said that we could move before if we see destabilizing forces in the market or where we see that the exchange rate might be leading to dynamics that eventually could affect inflation. So far we haven’t seen that.”

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A Mexican Standoff: Banxico vs. The Fed

8/6/15 Forbes
5504964078_df874cacb5_zBanxico, the Mexican central bank, is widely expected to raise interest rates alongside the Federal Reserve in the upcoming hiking cycle to avoid further weakness in the Peso (MXN).  There was even speculation that Banxico would preemptively hike during last week’s policy meeting. Policymakers ended up keep rates unchanged at an all-time low of 3.0%, but the central bank did take steps to buoy MXN.

The central bank increased the amount of dollars to be auctioned daily from $52 million to $200 million. They also reduced the amount MXN has to weaken for the central bank to sell an additional $200 million from 1.5% to 1%. MXN reacted immediately to the announcement, jumping 1.2% against USD, which is a notable move for the world’s most traded EM currency.

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Bank of Mexico Held Interest Rates Steady Ahead of Budget Cuts

02/12/05 Wall Street Journal

banco de mexicoThe Bank of Mexico’s five board members voted unanimously last month to keep interest rates unchanged, a day before the government unveiled a series of budget cuts to address the drop in oil prices and expectations of more difficult financing conditions ahead.

The central bank, led by Agustin Carstens, left the overnight lending rate target at 3% for a fifth consecutive meeting Jan. 29.

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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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Mexico Consumer Prices Rise as Central Bank Cuts Interest Rate

06/24/14 Bloomberg

drawing bar chartMexican consumer prices rose in the first half of June as the central bank unexpectedly cut the nation’s key interest rate.

Prices gained 0.08 percent, compared with the 0.1 percent median forecast of 22 economists surveyed by Bloomberg. The annual inflation rate climbed to 3.71 percent from 3.58 percent two weeks earlier, remaining below the 4 percent upper limit of the bank’s target range.

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