There are storms and then there are hurricanes. For Mexico, Donald Trump would be the latter, said the head of the central bank in an interview this morning.
The Republican candidate for U.S. president would be “a devastating hurricane of major intensity,” particularly if he carries through with promises made during his campaign, said Bank of México governor Agustín Carstens.
A win by Democratic candidate Hillary Clinton could also be potentially stormy, having said she would like to review the North American Free Trade Agreement and because she does not support the Trans-Pacific Partnership, Carstens said, “but there are differences in storms.
“Just as there are Category 5 hurricanes there are Category 1 hurricanes and there are tropical storms. The scenario for Mexico would be much better if we had Hillary Clinton as president of the U.S.,” the governor said without divulging where she would fall on the Saffir-Simpson hurricane scale.
Trump, he said, would be the “worse economic scenario for Mexico.”
Carstens also insisted that the peso is undervalued. “. . . the exchange rate is higher than it should be given the country’s economic fundamentals and considering the measures that have been adopted by the Finance Secretariat and the Bank of México itself.”
He said the federal administration’s 2017 budget and yesterday’s half-point increase in the central bank’s base rate to 4.75% will contribute to Mexico’s solid fundamentals.
Source: Milenio (sp)