trending Market Intelligence /marketintelligence/en/news-insights/trending/t58zz5peu_nebt3ed-oh1a2 content esgSubNav
In This List

Mexican central bank bracing for several potential economic shocks, minutes show

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Mexican central bank bracing for several potential economic shocks, minutes show

Banco de México said it will continue to take a "prudent monetary policy stance" against possible economic shocks, according to minutes from the regulator's most recent meeting, wherein it maintained the benchmark rate at 7.5%

The board of the regulator also believes that shocks may arise in the future, affecting the economy and leading to inflationary pressures.

Talks to rework the North American Free Trade Agreement and uncertainty over this are a factor, with markets already incorporating a high likelihood that negotiations will either be further extended or lead to an unfavorable outcome, it said.

The U.S. recently announced tariffs on steel and aluminum from the European Union, Mexico and Canada, with Mexico retaliating with its own tariffs on products from U.S. states that backed U.S. President Trump in the 2016 election.

According to the minutes, one central bank member noted that a possible trade conflict between the U.S. and China is also a risk, even though fears of that happening has eased to some extent.

On the domestic front, growth forecasts for 2018 and 2019 remain stable, and some members expect that higher growth rates seen in the first quarter of the current year will not continue into the next few months. Upcoming elections could also trigger volatility, with the duration and magnitude difficult to estimate.