Friday, February 10, 2017

Mexico Raises Rates


Gasoline on the fire (as a metaphor only...).

The central bank raised rates five times last year, lifting borrowing costs by a cumulative 250 basis points as the peso slid to successive record lows.



3 comments:

Andrew said...

Why did they raise gas prices? Any other reason for inflation?

Matt Franko said...

I believe they were previously subsidized prices to Mexicans in MXN ... maybe still are but less the 20%....

So now this is creating "inflation!" so they think they should raise rates to quell the "inflation!"....

Textbook Monetarist playbook 101...

Seve141 said...

President Nieto privatized the Mexican oil company Pemex,which pretty much had a monopoly in 2016.

The usual neoliberal arguments of more competition leads to more efficient operations and lower prices etc., were trotted out.

After a politically imposed period of mourning the Mexican people are now starting to be treated to the benefit of the free market.