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The global economy is going through “turbulent, volatile times,” making it hard to assess future monetary policy moves, Mexico’s central bank Governor Agustin Carstens said.
While Europe’s debt crisis has weakened the peso, a pick-up in the U.S. is fueling growth in Mexico, Carstens said in an interview at a banking convention in Acapulco today.
If U.S. economic growth continues to “surprise,” there is a possibility of seeing greater expansion in Mexico, he said. The central bank yesterday raised its estimate for expansion this year to a range of 3.25 percent to 4.25 percent, up from 3 percent to 4 percent. At the same time, Greece’s debt crisis is threatening to spread in Europe, weakening the peso.
“We’re living in a turbulent, volatile time and that certainly makes it difficult to assess what is the most adequate policy measure,” Carstens said. “The exchange rate is very important, and certainly the depreciation is something that has held us back, but then there are many other factors that we consider and certainly it would not be appropriate to say that is the key factor.”
The peso has declined 4.7 percent against the dollar in the past month and 15.1 percent in the past year. The currency strengthened 0.2 percent to 13.8095 at 10:40 a.m. in Mexico City.
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