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FILE PHOTO: The logo of the Central Bank of Mexico (Banco de México) is seen in its building in the center of Mexico City, Mexico, February 28, 2019. Photograph taken on February 28, 2019. REUTERS / Daniel Calf
MEXICO CITY (Reuters) – Mexico’s economy faces an unprecedented shock in the coronavirus pandemic and “idiosyncratic” factors, such as recent downgrades in the sovereign and state oil company Pemex’s credit ratings, making matters worse, the bank said central on Tuesday. .
Most of the bank’s board members “warned that the adverse environment facing the domestic economy as a result of the pandemic and lower oil prices are exacerbated by idiosyncratic factors,” the minutes of the meeting held Tuesday. Monetary policy outside the April 21 cycle of the central bank. .
“In this context, most members highlighted the recent downgrade of the sovereign and Pemex credit ratings by three agencies,” the minutes added.
The five members of the Banco de México board said that Mexican economic activity is forecast to contract “significantly” during the first half of the year, and stressed that the magnitude and duration of the effects of the pandemic are still unknown.
The economic shock of the coronavirus pandemic is already clearly visible in the Mexican economy, and the predicted declines in global economic activity are of a magnitude not seen since the Great Depression, according to the minutes.
Most bank board members said the economic shock is evident in consumer and business confidence, credit card spending, manufacturing orders, purchasing managers’ indices, sales of automobiles, air and land transportation, and hotel occupancy and tourist flows.
The bank unveiled around $ 31 billion in support of the financial system on April 21 and cut borrowing costs in the most decisive measure in the country to help the economy weather the pandemic.
Report by Anthony Esposito in Mexico City; Editing by Frank Jack Daniel and Matthew Lewis
