According to Moody’s experts, The depreciation of the Mexican peso seems “imminent” since the same conditions of the previous cycle of interest rate hikes by the US Federal Reserve (FED) that began in 2015 are being replicated.
The US company reached this conclusion in a report entitled “The coming depreciation” after analyzing the monetary and financial conditions of the last two global crises, in 2009 and 2020.
Until now, Mexico followed the same steps as the FED and increased interest rates to curb inflation, which reaches more than 8%.although the price of food increased twice as much, due to the effect of the Russian invasion in Ukraine and the post-pandemic impact of Covid-19.
Experts estimate that the upward cycle of rates in the United States will not end until 2024 in an attempt to return the level of inflation to 2%.as the country suffers from a higher price index since the 1980s that could lead to a recession, with a rate of 9.1%.
López Obrador, however, criticized those who “become happy and rub their hands” for Moody’s gloomy prediction, but warned that “they are going to stay with the desire” because “it is not going to happen like that.” In his daily morning conference at the National Palace, the president pointed out that “the Mexican economy” “is fine, it continues to grow.”
The Moody’s report, for its part, recognized that the Mexican peso “remained relatively stable after the initial shock generated by the pandemic in the first half of 2020” and better resisted the current shocks in the financial markets than other Latin American and foreign currencies. other latitudes.
Nevertheless, He insisted that the monetary restrictions of the US financial authority in the face of high inflation anticipate “a depreciation correction.” Experts consider that it was advantageous for the control of inflation in Mexico that a parity prevails for years that has practically not been devalued against the US currency.
Between November 30, 2018 and the close of Thursday, the parity of the dollar against the peso, according to the records of the Bank of Mexico (central) appreciated by 0.9%.
However, “this circumstance has begun to turn Mexico into a relatively expensive country, for example, for tourism,” said specialist Enrique Quintana, who assures that “exporters are not happy with this parity behavior either.” “They could be even more successful with a somewhat weaker peso,” he added, though he said “we would certainly have more inflationary pressures.”
Even this week, the deputy governor of the Bano de México Gerardo Esquivel pointed out that Mexico “could disassociate itself from the decisions of the Federal Reserve”, that is, no longer raise interest rates at the pace set by its US peer.
Source: Ambito
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