IMF Says Mexico Credit Line May Be Cut From Current $74 Billion

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11/20/19 – Bloomberg

By Eric Martin and Patrick Gillespie

The International Monetary Fund’s board plans to vote on Mexico’s request to renew its flexible credit line, possibly for less than the current $74 billion, before it expires next week.

Mexico is interested in reducing the size now that there’s greater certainty around its trade relationship with the U.S., Alejandro Werner, the IMF’s Western Hemisphere director, said in an interview Wednesday at Bloomberg’s headquarters in New York. Werner said he expects the board’s decision before the current agreement expires Nov. 28.

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Money for combating violence against women misused, Mexican official says

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10/15/19 – Reuters

By Oscar Lopez

Money intended for a national program to combat violence against women has been misused, a top Mexican official said on Tuesday, confirming a media probe saying the funds were spent on key-rings and refrigerator magnets as promotional tokens for the campaign.

Such use of funding intended for national, state and local governments to help support arrests and lower murder rates is “unacceptable,” said Interior Minister Olga Sanchez Cordero at a daily news conference in Mexico City.

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Mexico’s stimulus package to have ‘immediate impact’: finance minister

7/29/19 – Reuters

By Anthony Esposito

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A $25 billion stimulus package unveiled by Mexico on Monday should have an immediate impact, Finance Minister Arturo Herrera said, as Latin America’s second-largest economy teeters on the brink of a recession.

The package comes just days before Mexico’s national statistics agency publishes second-quarter growth figures and amid an discussion over whether the economy has slipped into recession.

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Shock Mexican resignation deepens danger for investors

7/10/19 – Financial Times

By Jonathan Wheatley

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Talk about slamming the door on your way out. Carlos Urzúa, Mexico’s finance minister until his shock resignation on Tuesday, slammed it four times.

The government, he said, was taking decisions on public policy without proper foundation. Economic policy should be evidence-based and free of extremism, on the left or right, but this was not so in Mexico. People had been imposed on the finance ministry who had no understanding of public finances. And this was being done by “influential persons” in government, with a patent conflict of interests.

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Forged by debt crises, Mexico’s new finance minister takes charge in choppy waters

7/9/19 – Reuters

By Stefanie Eschenbacher

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Mexico’s new finance minister Arturo Herrera is a pragmatic and respected policy maker who says he was inspired to study economics by the Latin American debt crisis that wrought financial chaos and wrecked livelihoods in his country.

Decades later, he must boost investor confidence in a shrinking economy buffeted by what his predecessor and mentor Carlos Urzua called “extremism” that led him to resign on Tuesday with a strongly worded letter.

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Mexican peso drops after Finance Minster Urzúa resigns

7/9/19 – CNBC

By Fred Imbert

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The Mexican peso dropped against the U.S. dollar on Tuesday after Mexico’s finance minister, Carlos Urzúa, stepped down from his post.

As of 4:05 p.m. ET, the peso traded down 1.1% at 19.13 per U.S. dollar. The peso also reached its lowest level in a month against the U.S. currency.

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AMLO Eyes Salary of Mexico Supreme Court Head in Austerity Push

12/11/2018 – Bloomberg

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Photographer: ALFREDO ESTRELLA

By Daniel Cancel

Mexican President Andres Manuel Lopez Obrador is just getting started in his drive to cut expenses and to fulfill campaign promises.

His next target is supreme court justices who he believes are making too much money.

After maybe U.S. President Donald Trump, the head of Mexico’s Supreme Court must be the highest paid public servant in the world, AMLO said Tuesday morning at his daily press conference. The top court judges make as much as 600,000 pesos ($29,731) per month, he said.

“We can’t have a rich government and poor people,” AMLO said.

Lopez Obrador is vowing to not only cut his salary and those of officials fulfilling top government posts, but also planning to raise wages for lower-level public servants. In daily press conferences he’s been repeating that you shouldn’t get into politics if you want to make money and that it’s all about serving your country and people.

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Standard & Poor’s Lowers Mexico’s Outlook to Negative

08/23/2016 The Wall Street Journal

mexico cityMEXICO CITY—Standard & Poor’s on Tuesday lowered the outlook on Mexico’s sovereign debt rating to negative from stable, becoming the second ratings firm to do so this year on the belief that government finances could deteriorate in the coming years.

S&P affirmed Mexico’s triple-B-plus rating—two notches above the minimum investment grade—but said there was a 1-in-3 chance of a downgrade in the next 24 months. A deterioration of Mexico’s debt or interest burden could raise the vulnerability of public finances to adverse shocks, the firm said in a release.

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Bank of Mexico Sticks to 2016 Growth Outlook, Trims 2017 Forecast

5/26/16 Wall Street Journal 

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MEXICO CITY—The Bank of Mexico said Wednesday that it still expects the country’s economy to grow between 2% and 3% this year, but lowered its growth forecast slightly for 2017.

In its quarterly inflation report, the central bank forecast gross domestic product would expand between 2.3% and 3.3% in 2017, less than its previous estimate of 2.5% to 3.5%. The economy grew 2.5% in 2015 and expanded 2.6% in the first quarter of this year.

The main reason for the 2017 change is the lower outlook for U.S. industrial production, which is a driver of Mexican output, Bank of Mexico Gov. Agustín Carstens said at a news conference.

Growth could be better if private consumption in Mexico continues to gain strength, or the economy sees favorable effects from overhauls in areas such as energy, telecommunications and the financial sector. On the other hand, a slowdown in the global economy, and particularly the U.S., and more complex international financial conditions restricting investment could lead to lower growth than expected, the bank said.

The central bank still expects the inflation rate, currently at 2.5%, to remain below its 3% target in coming months, possibly rising temporarily above that level toward the end of the year.

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Mexico Gets Downgrade From Credit Traders as Pemex Woes Escalate

2/17/16 Bloomberg 

120px-Philippine-stock-market-boardTo credit traders, Mexico is no longer worthy of its credit rating.

The cost to protect Mexico’s bonds against default for five years has jumped twice as much as the average average for countries that share its BBB+ rating from Standard & Poor’s. At 2.18 percentage points, Mexico is now closer to the average for nations rated one level lower than current peers Poland, Spain and Iceland.

Oil’s collapse is pummeling Petroleos Mexicanos, the state-owned crude producer, and fueling concern that Mexico may have have to step in to provide financial support at a time when the nation faces spending cuts, said Alejandro Padilla, a strategist at Grupo Financiero Banorte SAB. Pemex, as the company is known, is set to surpass $100 billion in total debt this year after it increased borrowing in recent years to stem output declines. The price of Mexico’s crude-export mix has fallen 67 percent in the last year and a half.

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