A group of over 200 shareholders of Credito Real, a troubled Mexican payroll lender, this week issued a legal letter demanding the company hold a general assembly within the next 15 working days in their latest bid to recoup billions in losses, Reuters reported. Credito Real defaulted on a 170 million Swiss franc ($175.98 million) bond last year, kicking off a commercial liquidation process in Mexico criticized by shareholders for lacking transparency.
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The Mexican peso staged a strong rebound from its recent lows on Wednesday after inflation data spurred expectations that monetary policy would need to stay tight, while the Brazilian real rose to a one-week high, Reuters reported. The peso, the best performing currency in Latin America this year, was up 0.8% against the dollar, snapping a six-day losing streak. Data showed consumer prices in Mexico fell more than expected in the first half of May, with 12-month headline inflation reaching 6.00% — the lowest level since September 2021.
The Mexican government sent in marines Friday to take over part of a private railway line in southern Mexico, the Associated Press reported. It was not clear whether the seizure of the rail line on the Isthmus of Tehuantepec constituted an expropriation. The government said that it would compensate the owners for what it called the “temporary occupation” of the railway run by a Mexican company, Grupo Mexico Transportes.
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Mexico’s industrial production took an unexpected hit in March, driven by a decline in manufacturing output and a stark drop in mining activity as tighter financial conditions drag down Latin America’s second-largest economy, Bloomberg News reported. Mexican industrial production declined 0.9% from February, below economists’ median forecast for a 0.1% contraction. Mining output dipped 3.5% in the monthly comparison while manufacturing slowed 1.1%. The likelihood of a US recession and high interest rates could hurt the sector and the overall economy over the course of 2023.
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Mexico’s annual inflation slowed for the third consecutive month to 6.25% in April, data from statistics agency INEGI showed on Tuesday, fueling expectations the Bank of Mexico's monetary tightening cycle may be ending, Reuters reported. April's reading was nearly as low as October 2021, though it came slightly above the consensus forecast of 6.23%, as determined by a Reuters poll. Consumer prices fell 0.02% in April, according to non-seasonally adjusted figures, against an expected 0.04% fall. The core index, which strips out some volatile food and energy prices, rose 0.39% during the month.
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Mexico’s inflation eased roughly in line with analysts’ expectations in early April as the central bank weighs ending a record monetary tightening cycle in Latin America’s second-biggest economy, Bloomberg News reported. Consumer prices rose 6.24% in the first half of the month compared to the same period a year earlier, down from 6.58% in late March, the national statistics institute reported Monday.
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The Bank of Mexico's governing board struck a more dovish tone at its March 29 monetary policy meeting, with board members discussing the possibility that the bank's rate-hiking cycle may have reached its end, minutes from the meeting showed Thursday, Reuters reported. Banxico, as the Mexican central bank is known, hiked its benchmark interest rate by 25 basis points to 11.25% at that meeting, moderating the pace of a tightening cycle that began in mid-2021.
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Mexican automotive production and exports rose in March from the same month a year earlier, data from the national statistics agency (INEGI) showed on Monday, Reuters reported. Production increased by 13.12% to 346,124 vehicles, while auto exports rose 3.88% to 272,687 vehicles, the data showed.
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The Mexican economy is seen as expanding up to 3.0% both this year and in 2024 as consumer price inflation is expected to slow, according to a copy of the government's draft budget document seen by Reuters. The finance ministry is set to present the 2024 budget to Congress on Friday. The ministry estimates that Latin America's second-biggest economy will grow between 2.2% and 3.0% this year, and between 1.6% and 3.0% in 2024, according to the document, as the country continues to claw back pandemic-led losses.
Mexico’s inflation eased more than economists expected in early March, likely boosting the odds that the central bank will slow a record monetary tightening cycle at next week’s meeting, Bloomberg News reported. Consumer prices rose 7.12% in the first two weeks of the month from the same period a year earlier, down from 7.48% in late February, the national statistics institute reported Thursday. Core inflation, which excludes volatile items such as fuel, was 8.15% on an annual basis, below the previous measure of 8.21% and matching economists’ estimate.
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