Jose Antonio Meade on Combating Poverty in Mexico

2/11/16 Harvard Political Review

13317170344_3f13f47d5c_oHarvard Political Review: In the last five years, you have been in four different Secretary positions—Energy, Finance, Foreign Affairs, and now Social Development. What is next? What is the biggest challenge for you in 2016?

Jose Antonio Meade: I believe public service is a vocation, a vocation that has a path and a journey. And many times, in politics as well as in life, what matters is the journey. If one is preoccupied with the final destination, one runs the risk of not only losing focus on the journey but of not enjoying or taking advantage of it, even deviating from the said journey. That, for me, as a life lesson has always been important. Today, who I am, is the secretary of social development, a fascinating institution, an institution that allows me to touch lives and to transform the stories of families. I hope that what is next is a remembrance of good management of the secretariat [of social development].

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Mexican Peso Falls to Record, Leads Drop Among Major Currencies

2/11/16 Bloomberg Business

pesosThe Mexican peso fell to a new record low as $800 million in dollar sales by the central bank this week was overshadowed by speculation that global growth will falter.

The peso fell 1.5 percent as of 11:31 a.m. in Mexico City, leading losses among the world’s most-traded currencies, as emerging-market assets were swept up in a global selloff of all but the safest securities. Global equities tumbled toward a bear market as investors lost faith in central banks’ ability to support the worldwide economy.

The peso has dropped 10 percent this year, almost four times as much as the next-worst performer among a basket of 16 major currencies, as investors sell off the most liquid and easily tradeable emerging-market assets. The central bank sold $400 million in auctions Thursday to support the currency, after selling $400 million on Feb. 8, when bank Governor Agustin Carstens said that peso weakness isn’t justified by the country’s economic fundamentals.

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Mexican peso hits new low as rout accelerates

2/10/2016 Financial Times

mexican pesosFor sun seeking Americans, that beach holiday in Mexico is getting cheaper by the day.

The Mexican peso fell to a fresh record low on Tuesday, coming within seven cents of breaching the psychologically important 19 per dollar mark.

The currency extended its losing streak to a fourth straight day, dropping by as much as 1.4 per cent to 18.93 per dollar in early morning trading before bouncing slightly to trade 0.6 per cent lower at 18.79 per dollar.

The decline takes the peso’s losses so far this year to 8.5 per cent – making it the second worst emerging market performer in the world after the Argentine peso.

The drop comes even after the Mexican central bank stepped up its defense of the currency, buying up a $400m worth of pesos in auctions on Monday in a bid to stem the ferocity of the decline.

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Mexico Peso Tumbles After Government Signals Spending Cuts Loom

2/09/16 Bloomberg

Mexican pesoMexico’s peso fell to a record low after the government signaled more spending cuts, further damping the outlook for Latin America’s second-biggest economy.

The peso dropped 0.7 percent to 18.8029 per dollar as of 10 a.m. in Mexico City, the most among 16 major currencies tracked by Bloomberg. Its 8.5 percent slide since the end of December marks the worst start to any year since the 1993 redenomination.

Mexico has been caught up in a global currency rout as oil plunges and concerns over the health of the global economy deepen. The plunge in crude, which has already spurred a decline in public spending after revenue from state-owned Petroleos Mexicanos tumbled, also means that Mexico needs to prepare itself for preventative spending cuts for next year, Finance Minister Luis Videgaray said Monday in a radio interview. The oil company, known as Pemex, also needs to reduce spending, Videgaray told Radio Formula.

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Mexico central bank seen holding steady despite peso slump

2/4/2016 Reuters

peso by Guanatos GwynFeb 4 Mexico’s central bank is expected to hold borrowing costs steady on Thursday after inflation expectations improved despite a deep slump in the peso last month.

All 15 analysts surveyed last week by Reuters said they expect the central bank to hold its key lending rate at 3.25 percent.

The Banco de Mexico hiked its key rate in December for the first time in seven years from a record low of 3 percent, hoping to support the peso after a rate increase by the U.S. Federal Reserve threatened to sap demand for emerging market assets.

The Mexican central bank decision comes after the U.S. Federal Reserve kept borrowing costs unchanged last week. Mexican policymakers have suggested they could closely follow the moves of the Fed.

Mexico’s currency has hit a series of record lows against the dollar but that has not yet stoked inflation, which is near its lowest level on record.

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Mexico’s Carstens Sees ‘Major Correction’ in Peso

1/24/2016 The Wall Street Journal

Agustin_Carstens,_IMF_116DC2lgDAVOS, Switzerland—Mexico has been unfairly lumped together by investors with other emerging economies, leaving its currency severely undervalued and on course for an upward correction,Agustin Carstens, Mexico’s central bank chief, said in an interviewwith The Wall Street Journal.

The peso lost 21% of its value against the dollar in the past year, with large losses in the past month alone.

“My sense is that there has been some overreaction in particular in the exchange rate,” Mr. Carstens said on the sidelines of World Economic Forum meetings here. Because its markets are deep and liquid, he noted, investors tend to sell Mexican assets when they want to sell emerging economy assets broadly.

“Through time that pressure tends to disappear,” he said. “That can give place for a major correction, in the case of Mexico for example, which is something I would be expecting.”

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Mexico Peso’s Top Forecaster Sees Rally for Worst Major Currency

1/26/2016 Bloomberg Business

mexican pesosMexico’s peso, the worst performing major currency in 2016, is poised for a rebound by the end of this year, according to its most-accurate forecaster.

Its 30 percent depreciation in the past year and a half is making the economy more competitive for manufacturers looking for lower costs, and that should help fuel growth that eventually reverses some of the losses, according to Sireen Harajli, a strategist for Mizuho Bank Ltd. who was the best analyst for the peso in the fourth quarter, according to a Bloomberg ranking.

“It makes for sounder economic fundamentals,” Harajli, who has been covering the peso for five years at Mizuho and Credit Agricole SA, said in an interview. “Despite the weakness we’re expected to see in the peso, we think that for the longer term it’s certainly” among the stronger currencies in Latin America.

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