By Joanna Treeck
WASHINGTON (MNI) – The Mexican central bank has been considering
the option of imposing capital controls should the inflow of hot money
speed up, but it has no concrete plans yet, Bank of Mexico Governor
Agustin Carstens told Market News International on Sunday.
“We have been receiving substantial capital inflows,” Carstens said
on the sidelines of the International Monetary Fund/World Bank meetings
here. He warned that a second round of quantitative easing in the United
States might speed up that process.
The level of concern will depend on “the speed and type of capital
that flows into the country,” he said.
“Right now the pressures on the Mexican peso have not been as
intense and we imposed an options mechanism to enhance our accumulation
of international reserves. But if there is a persistent lax monetary
policy in the main industrialized economies, it might be an issue for us
too,” Carstens noted.
“We don’t have capital controls and right now we don’t have a
contingency policy that we have agreed on our board that we can make
public, but it is an issue that we have been considering,” Carstens
said.
Like many central bankers during this weekend’s meeting, Carstens
rejected the characterization of current volatility in foreign exchange
markets as a “currency war.”
“I think that we certainly can talk about the fact that there are
tensions but that does not mean that it is a war,” he said.
Looking at the broader economic picture, Carstens said that Mexico
“had a good year, much better than we anticipated one year ago.”
“The economy is growing 5% or close to 5%, inflation is under
control, we have good access to capital markets, we have strengthened
our international reserve position so things are moving forward,” he
said.
— Frankfurt bureau: +49-69-720 142. Email: jtreeck@marketnews.com —
[TOPICS: MT$$$$,M$$CR$,MX$$$$,MGX$$$,M$T$$$,M$M$$$]
