Banco de México’s governor says maintaining sustainable public finances is important and is respectful of federal government’s management of fiscal policy
Key comments
- Says drop in commodity prices, in particular oil, has reduced emerging economies’ room for maneuver when deciding debt and fiscal policy.
- Says bank will hold its usual monetary policy meeting on may 14 despite out-of-cycle rate cut this week, will continue to evaluate and take actions it deems necessary.
- Says access to financing is an important alternative for individuals, households and firms who have seen their income reduced.
- Says highly unlikely that big personal spending decisions will be made now despite lower cost of financing after rate cuts.
- Says challenge is getting through short-term crisis, and as economy gradually returns to normal it will be important to give liquidity, financing to those who need it.
- Says we’re seeing a significant drop in headline inflation, in particular as gasoline prices drop.
- Says in short term lower energy prices and in medium term greater economic slack could exert downward pressure on inflation.
- Says in short term supply issues with certain goods and in medium term foreign exchange pressures could exert upward pressure on inflation.
- Says in short term the impact of energy prices is clearly the dominant force on headline inflation.
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