Mexican peso not affected by finance chief's resignation: Citibanamex

Source: Xinhua| 2019-07-16 13:04:21|Editor: Yamei
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MEXICO CITY, July 15 (Xinhua) -- The Citibanamex said Monday that the recent resignation of Mexico's Finance Minister Carlos Urzua would have no significant impact on the value of the Mexican currency peso over the coming months.

A volatile Mexican peso will likely come as a result of decisions by the U.S. Federal Reserve, the local subsidiary of Citigroup Inc added when assessing the impact by Urzua's resignation on July 9 over economic policy disagreements.

The financial group deems the following ripple in the exchange market as indicating a nonconsensus on financial policy in the administration of President Andres Manuel Lopez Obrador.

According to it, the immediate appointment of Urzua's deputy, Arturo Herrera, to take over apparently putting an end to the market speculation.

The peso traded at under 19 pesos to the U.S. dollar on Monday, after reaching a high of 19.3685 last week, following Urzua's resignation.

"We doubt the peso will see a significant impact in the future, since appointing Herrera calmed the markets," said Citibanamex.

"Emerging market currencies will remain stable until the Fed's first rate cut, and the Mexican peso could perform lower than its counterparts, but won't have a significant depreciation," it noted.

Some observers expect the U.S. Fed to lower the interest rate at its upcoming meeting on monetary policy at the end of the month, after its chief Jerome Powell said he would take steps to support the U.S. economy's expansion.

Mexico's economic fortunes are seen usually in step with the U.S., its leading trade partner, however it currently seems to be experiencing a slowdown despite the U.S. economy's upturn.

Mexico's central bank Banxico has forecast a growth of between 0.8 and 1.8 percent for 2019, below last year's 2-percent expansion.