Mexico's central bank is expected to hike the benchmark interest rate to a new historic level of 8.5% next week, hoping to contain rising inflation while the economy shows better-than-expected growth, a Reuters poll revealed on Thursday. All 13 analysts polled expect Banxico, as the central bank is known, to hike its benchmark rate by three-quarters of a percentage point when the monetary authority announces its decision next week. This would be Banxico's second 75-basis-point hike this year, and mirrors the most recent policy decision taken by the U.S. Federal Reserve.
Read more
Mexico's COVID-battered aviation sector has benefitted from a robust reactivation of travel, but analysts fear its takeoff could be soon shaken by recession in the United States, Reuters reported. Profits of air terminal operators in Mexico's most important tourist destinations grew strongly last quarter, thanks to solid traffic numbers for both domestic and international passengers. "Aviation has had a surprising recovery," said Pablo Casas, director of the National Institute of Aeronautical Legal Research (INIJA).
Read more
Mexico’s programs and subsidies to tame inflation will cost the country almost 575 billion pesos ($28 billion) this year as the government tries to cap inflation that has spiked to the highest in over 21 years, Bloomberg News reported. Finance Minister Rogelio Ramirez de la O said Tuesday that the wide-ranging government programs used to contain price gains include gasoline and residential electricity subsidies for a total of 503 billion pesos on top of fertilizer handouts, measures to guarantee food supply and freezing highway tolls.
Read more
Grupo Financiero Inbursa is still in the process of buying Citigroup's Mexican retail bank unit and is inviting other business partners to join the bid, Inbursa's Director of Investor Relations Frank Aguado said on Wednesday, Reuters reported. The comment, made during a conference call discussing its second-quarter results, comes days after Spain's Banco Santander said it had dropped out of the process to buy Citibanamex, having submitted a non-binding offer earlier this year.
Read more
Mexican conglomerate Alfa will not provide any financial guarantees to its telecommunications unit Axtel during the subsidiary's spin-off process, Alfa's top financial officer said on Thursday, Reuters reported. Axtel is expected to reach $35 million cash flow this year, sufficient to carry out its operations, Alfa Chief Financial Officer Eduardo Escalante said during a call with analysts to discuss second-quarter results.
The U.S. government has forced Mexico into negotiations over what Washington considers unfair practices that are effectively excluding U.S. and other foreign companies from the Mexican energy sector in violation of the free trade agreement they signed with Canada, the Associated Press reported. Mexico says it has received a similar notice from Canada related to its electricity law. The U.S.
A commercial court recognized the dissolution of Mexico's Credito Real and ordered its judicial liquidation, the troubled payroll lender said in a filing yesterday, Reuters reported. Credito Real, reeling from a bond default, said in June it was aiming for an orderly restructuring of its debt.
Unregulated lenders in Mexico that specialize in loans to low-income people grew at a breakneck pace over the past decade, until accounting irregularities at three Deloitte-audited firms threw the sector’s credibility into question, the Wall Street Journal reported. The three lenders—Crédito Real SAB de CV, AlphaCredit Capital SA de CV and Grupo Finmart—have discredited some financial statements as unreliable. All retained the same auditor for years: Deloitte Mexico, the Mexico City-based unit of Deloitte Touche Tohmatsu Ltd.
Read more
Mexico's annual inflation accelerated in June to a level not seen since early 2001, official data showed on Thursday, suggesting the central bank will have little choice but continue its monetary tightening to tame spiraling consumer prices, Reuters reported. Mexican consumer prices rose 7.99% in the year through June, the national statistics agency said. That was also far above the central bank's target of 3%, plus or minus a percentage point, and marked the highest level since January 2001, when Mexico's 12-month inflation stood at 8.11%.
Read more
Remittances sent to Mexico, a major boon for Latin America's second-largest economy and especially for low-income families, reached an all-time high of $5.17 billion in May, central bank data showed on Friday, Reuters reported. It was the first time monthly remittances surged past the $5.0 billion mark and compares with $4.72 billion in April and $4.53 billion in May 2021.
Read more