By - Nov 11, Bloomberg.comThe peso’s biggest rally on record may prompt Mexico’s central bank to cut interest rates next year to boost exports after other Latin American policy makers raised borrowing costs to cool their economies.
Governor Agustin Carstens signaled during a Nov. 2 meeting with economists in New York that he would consider cutting rates should the peso keep gaining, according to analysts from Barclays Capital, Deutsche Bank AG and UBS AG who attended the meeting. The bank may lower borrowing costs a quarter percentage point to 4.25 percent by March, Mexican futures trading show.
.......Countries from Brazil to Thailand to Colombia are imposing levies on foreign capital, ending tax exemptions for foreigners or stepping up dollar purchases in the currency market. Carstens criticized such moves in an Oct. 27 radio interview.
“We would try to avoid falling into these circumstances, although you can never discard all possibilities,” Carstens said. Currency wars are “very destructive,”......read in full
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