Mexico expects ‘major correction’ in peso

Mexico Central Bank Governor Agustin Carstens expects a “major correction” in the value of the country’s currency, the Wall Street Journal reported him as saying on Sunday.

“My sense is that there has been some overreaction in particular in the exchange rate,” the Journal quoted Carstens as saying.

“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.”

Mexico’s peso hit a record low against the dollar on Thursday. The central bank hiked borrowing costs in December for the first time in seven years in a bid to stem weakening in the peso after the Federal Reserve lifted U.S. interest rates.

In a separate interview at the weekend, Carstens told Bloomberg that it is “essential” that Mexico matches the U.S. Federal Reserve on monetary policy, and that the question is whether to act before or after the United States.

“Following the Fed is essential,” Bloomberg quoted Carstens as saying.

“Whether the decision is taken before or after will depend a bit on other intervening factors that we can see at the moment we make our decisions.” (Reporting by Christine Murray; Editing by Sandra Maler)

3 Responses
  1. Darryl Smith

    The Mexican govt is VERY Hostile towards Americans and Canadians. No more vehicle imports, and gasoline 3 times as expensive as in Texas. The Peso will see 1-30 by summer at the rate we are going.

    1. IHP

      You should find a better attorney hahahahah it’s incorrect to say you can not import a vehicle to Mexico, in fact it’s easier now than it was just 3 years ago. It used to be that the car would need to be 10 years old but not older than 15 years old. Now the car can be 5 years old. You cannot buy a new car in the US and import it into Mexico, that is true, but if you want to talk about hostile, try being a Mexican and importing your car to the US or Canada, kiss that goodbye hahahahah Cars are very easy to import and with last year’s law changes in immigration it’s actually the Mexican government’s preferred method for foreigners driving in Mexico. Besides, gas prices and if a foreigner can bring their car into the country has nothing to do with the value of the peso. Currency values depend on how much foreign investment is going into a country, nothing else, nothing more.

      1. Darryl Smith

        Mexicans don’t need to import cars into the USA as there are more Baja plates in San Diego than Mexico. NAFTA is one way only benefiting the Mexican Govt. Such a pity to discover the Vallarta Daily website is run by anonymous bloggers without faces or names. This is a complete waste of time to post anything meaningful here.

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