Bloomberg News

Mexico Has Room to Maneuver Amid Volatility, Carstens Says

September 28, 2011

(Updates with comment in third, fourth paragraphs.)

Sept. 28 (Bloomberg) -- Mexico has flexibility in crafting a response to volatility in international markets, central bank Governor Agustin Carstens said.

“Today we enjoy, as few central banks in the world, a wide margin for maneuvering in monetary policy to respond to turbulence in international markets without putting at risk the goal of price stability,” Carstens said, according to a presentation attributed to him and posted on the central bank’s website today.

While a recession can be avoided in the “best case scenario,” many countries “will not be able to avoid hard times and prolonged periods of low economic growth,” Carstens said.

The U.S. and Europe are particularly vulnerable, he said.

Mexico’s economy grew 3.74 percent in July from a year earlier, the national statistics agency said today on its website.

Mexico’s economic growth is slowing this year from 5.4 percent in 2010 as a global economic slowdown reduces sales to the U.S. The central bank, which on Aug. 10 cut this year’s forecast for growth to 3.8 percent to 4.8 percent from 4 percent to 5 percent, said last month it would consider cutting interest rates if the economic outlook worsened.

--Editors: Jonathan Roeder, Robert Jameson

To contact the reporter on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net


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