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Hacienda Hedge: platinum lining to Mexico’s cloud

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barrels of oil

It has become a Rite of Spring. Each year Mexico rolls the dice and makes a huge options bet on the future direction of oil prices. It’s so predictable that it has its own nickname in financial circles — the “Hacienda Hedge” or the “Pemex Hedge.”

Basically Mexico bets heavily on crude oil’s price, using options to assure a price for future deliveries of Mexican, or “Maya” crude.

Wall Street holds its breath.

The Pemex Hedge answers the question, “What does Mexico, a major oil exporter, think is going to happen to oil prices?”

Like any private financial transaction, especially a massive one such as the Pemex Hedge, there are many unknown and potentially market disrupting details and few known details. Exact numbers of barrels hedged, the cost of arranging the private options to sell at a fixed future price,  and the months in which the future sales are price guaranteed are among the unknowns.

But a major “known” is the price.

This year Pemex, or more likely Mexico’s treasury, thought the future price would be an average US$49 a barrel, and publicly disclosed this vital detail.

If the “M” in Mexico stood for “matador,” it would be two ears, the tail, and the horns of the bull — a bravissimo performance. The aficionados would be on their feet, cheering and throwing hats and flowers into the bull ring. The public may never know if the hedges were sold, or closed out prior to expiration as oil process collapsed, but my estimate is that the Hacienda Hedge 2020 earned or saved Mexico US $6 billion, almost a Soros-sized coup.

Taking a reasonable percentage of Mexico’s exports, based on 2019 output, “normalizing” the West Texas Intermediate benchmark price at about $15 a barrel before the fluke of the lack-of storage-capacity price collapse this week, working from too meager publicly available figures, if every cloud has a silver lining, there was a welcome ray of sunshine through Mexico’s cloud, a platinum one instead of silver.

Carlisle Johnson is a journalist based in Guatemala.

Corona water, face shields among corporate donations to aid coronavirus efforts

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100,000 bottles of Corona water were delivered free to hospitals in México state.
100,000 bottles of Corona water were delivered free to hospitals in México state.

Hospitals in the state of Mexico recently took delivery of 100,000 bottles of Corona, but they weren’t filled with beer. 

As many large corporations are doing, the brewery has shifted production to help support medical staff on the front lines of the coronavirus pandemic; the bottles with the familiar shape were filled with purified water. Ford México, the giant bakery firm Bimbo, and the resources company BHP have also contributed resources to support medical staff during the pandemic.

Beginning April 27, Ford’s Chihuahua plant will convert operations to produce 100,000 plastic face shields over the coming days, the company announced. The first 20,000 will go to Chihuahua, Sonora, Guanajuato and the state of México, regions where Ford has manufacturing plants. 

An additional 60,000 shields will go to the federal government to distribute as it sees fit, and 20,000 will be destined for countries in Central America where Ford also has plants.

Grupo Bimbo, the world’s largest bakery (which in February had to close its plant in Wuhan, China) is pledging some 200 million pesos (around US $8 million) toward support for medical staff and small businesses in Mexico. 

Ford México's Chihuahua plant will turn out 100,000 plastic face shields.
Ford México’s Chihuahua plant will turn out 100,000 plastic face shields.

The aid package includes the distribution of 1 million face masks and 2.5 million box lunches to medical personnel around the country. 

Also, 70 million pesos will go to fund the temporary hospital erected in Mexico City’s Citibanamex Center, which has a capacity of 854 beds for patients with respiratory symptoms. 

Small businesses will receive financial incentives to keep them afloat, as well as 1 million cloth masks to protect employees.

Joining these efforts is BHP, the Australia-based mining and resources company whose global assets in 2019 were upwards of US $100 billion. 

The company has pledged US $100,000 in coronavirus aid. Half of the funds will go to the Mexican Health Foundation and used for training health professionals, converting hospitals to coronavirus units and research projects, among other efforts. 

The remaining US $50,000 will go to Cáritas Tampico, a non-profit in Tamaulipas that serves vulnerable communities in the southern part of the state, as well as in northern Veracruz. The funds will provide food and medications to those in need in that region. 

For its part, Corona will continue to provide 200,000 liters of drinking water to neighborhoods around Mexico City each week, which it has done since earlier this month. The company also pledged to continue working with the government on ways to support medical personnel.

Mexico currently has 9,501 confirmed cases of the coronavirus and has recorded 857 deaths; 2,627 people have recovered.

Source: El Financiero (sp), El Universal (sp), El Debate (sp)

Chinamperos help Mexico City residents by supplying fresh produce

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Chinampero Coat Rufino with fresh lettuce.
Chinampero Coat Rufino with fresh lettuce.

The chinampería, a highly productive agricultural area in the Mexico City borough of Xochimilco, has been providing food for the city for hundreds of years. And before there was a Mexico City, it fed indigenous groups for thousands of years.

The chinampería has now taken on additional importance since much of the city has been locked down. Chinamperos, as the people who farm the land are called, have recently been driving into the city to sell their produce directly to residents who are under government orders to Quedaté en Casa (stay at home).

Coat Rufino and Minerva González, his wife, are chinamperos who usually sell their produce to restaurants in Mexico City, but almost all restaurants have closed and the handful that remain open have few customers.

“We had the idea to sell to people in the city,” said Rufino. “We knew that many people were staying inside. My wife designed a poster and we put it on Facebook.” Hortalizas Mago, as their business is called, had only five clients the first week they opened for business but that grew to around 20 just a week later.

Every Monday, Rufino and González cram their small car with the produce they’ve harvested just a day or two before: lettuce, bok choy, kale and other vegetables. “People text us what they want,” said González. “Sometimes we have to buy tortillas, sweets, mushrooms and other things that we do not grow.”

Ana Sofia Villas is a happy customer of the service.
Ana Sofia Villas is a happy customer of the service.

It’s about an hour’s drive from San Gregorio Atlapulco, where they live and work, to the city proper. When they arrive, they park on the street and send text messages to their clients almost all of whom show up, like Rufino and Gánzalez, wearing masks. The two take the extra precaution of wearing gloves.

Raquel Louctalot is one of the customers that has been buying from Rufino and González since they started driving in. “They’re from the chinampa,” she said. “They’re producers so I want to support them.” All of the customers said the food is fresher, keeps longer and is much cheaper; often less than half the cost of supermarkets.

Ana Sofia Villas walked away with a bag crammed with produce that cost her 300 pesos (about US $13). “I am happy with this,” she said. “If they continue to come in after the crisis, I will continue to buy from them.”

Rufino said they always bring extra food in case somebody walking by wants to purchase something and they always give people a little something for free. “I give them a little verdolaga (purslane),” he said. “Maybe they will want to buy some next week.”

He or his wife hand their customers the samples once the order has been filled, saying, “Here is a little gift.”

It’s a long day for the couple. They spend two or three days harvesting their produce, a couple of hours buying the items they don’t grow and then are up at 6:00 Monday morning to organize the orders. It’s then a long day in the city, usually ending around 3:00, and a drive back to their home.

“I think it is worth it,” said Rufino. “We are bringing food to people who need it. We lost an entire area we planted — red lettuce — because there was no one to buy it. So we are not losing everything and we are earning some money.”

• Hortalizas Mago can be reached at 552 949 3115.

Joseph Sorrentino is a freelance writer and photographer currently living in San Gregorio Atlapulco, which is part of Xochimilco. His articles and photographers have appeared in In These Times, Commonweal Magazine, US Catholic and La Jornada del Campo and other newspapers and magazines.

CORRECTION: The earlier version of this story incorrectly identified the woman in the photo above. Our apologies.

AMLO announces more austerity, slashes spending to confront economic woes

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López Obrador
López Obrador: social programs, health, security and infrastructure projects unaffected.

President López Obrador is betting that more government austerity rather than greater spending will help the economy weather the coronavirus storm.

López Obrador outlined a range of spending cuts on Wednesday morning although none will affect the government’s social programs, infrastructure projects, the Health Ministry, the National Guard or the armed forces.

The salaries of high-ranking officials will be cut by up to 25%, they won’t receive end-of-year bonuses and 75% of the federal budget approved for the payment of general services and the purchase of supplies will not be used in 2020, the president said.

Ten deputy ministers’ offices will be eliminated but no federal employees will lose their jobs, López Obrador said, adding that many government offices that don’t provide essential services directly to the public will be temporarily closed to generate additional savings.

While there will be no dismissals, the government will not hire any new staff, he said.

The president said that the deep cuts as well as government “efficiency and honesty” will allow an extra 622.5 billion pesos (US $25.4 billion) to be spent on social programs and key infrastructure projects.

López Obrador also said that the government will provide 3 million loans to poor and middle-class Mexicans to help them through the coronavirus-induced economic downturn and reiterated his pledge to create 2 million jobs by the end of the year.

Many of those jobs are expected to be created by the government’s infrastructure projects. The Santa Lucía airport, the Maya Train, the Dos Bocas oil refinery and many other projects are all going ahead despite the coronavirus pandemic.

Among the social programs that will either maintain their existing funding or receive additional resources are the Sembrando Vida (Sowing Life) tree-planting employment scheme, the youth apprenticeship scheme, student scholarship initiatives and the pension schemes for the elderly and disabled.

There will be no cuts to health care or the state oil company and agricultural schemes that deliver fertilizers to farmers and pay them guaranteed prices for five products will continue.

Despite the additional austerity measures, López Obrador stressed that the Finance Ministry will have the funds it requires to provide resources to the states, make debt repayments and pay all government employees.

He said that his response to the crisis – cutting spending while supporting the poor – is “completely different” to what was done in Mexico in the past when “neoliberal” governments responded to economic crises.

The measures outlined by the president will take effect today after their publication in the government’s official gazette and remain in place until the end of the year.

The plan presented by López Obrador this morning includes many of the measures he announced just over two weeks ago to mitigate the economic impact of the coronavirus pandemic. Mexico’s most prominent business groups have criticized the government’s economic response to the coronavirus crisis, claiming that it doesn’t do enough to support the economy.

The Business Coordinating Council (CCE), an umbrella organization representing 12 business groups, responded much more warmly to the support offered to the economy by the central bank, which cut its benchmark interest rate to 6% on Tuesday and announced 750 billion pesos (US $30.5 billion) in support for the financial system.

Those measures will provide “relief” to the battered Mexican economy, the CCE said.

Source: Reforma (sp), La Jornada (sp), Milenio (sp) 

Gasoline sales tank putting stations at risk, delaying ships in Veracruz

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Business is slow at Mexico's gas stations.
Business is slow at Mexico's gas stations.

The coronavirus pandemic is taking a heavy financial toll across Mexico’s petroleum sector: crude prices have slumped, gasoline sales have plummeted and oil tankers are stranded off the country’s Gulf coast.

The price of Mexico’s export crude fell into negative territory for the first time ever on Monday as demand for oil remains low due to the global spread of Covid-19.

A barrel of Mexican crude recovered to US $7.12 at the close of trading on Tuesday – a 400% increase compared to Monday’s closing price of -$2.37 – but is only about one-eighth the price a barrel was selling for in the middle of January.

Although the federal government and state oil company Pemex have hedging programs in place, Mexico’s oil revenue is expected to decline significantly this year. Pemex, saddled with $105 billion in debt, has now been downgraded to junk status by both Fitch Ratings and Moody’s Investors Service.

Mexico’s gas stations are also in a precarious position: fuel sales at stations affiliated with the national gas station trade organization Onexpo declined 70% between April 10 and 18, the biggest slump ever.

According to an Onexpo document obtained by the newspaper Milenio, the ongoing viability of some gas stations is at risk due to the downturn in demand caused by the coronavirus crisis. Many of Mexico’s gas stations are run as small businesses although they sell fuel under the banner of large companies.

With Mexico now in phase three of the coronavirus pandemic, the demand for fuel at gas stations is expected to fall even further.

In that context, Onexpo is calling for assistance from the federal government that will help gas stations to survive and avoid a massive loss of jobs. It is asking that the government give gas stations more time to install new volume controls on pumps and allow them to delay employers’ contributions to the Mexican Social Security Institute so that they can maintain the minimum liquidity required to stay in operation.

Meanwhile, at least 15 tankers were stranded off the coast of Tuxpan, Veracruz, on Tuesday, according to the ship tracking website VesselFinder. The tankers are unable to offload the fuel they are carrying due to a lack of storage space in the Tuxpan port.

The drop in demand for fuel has led to a glut, which in turn means that there is scant space to store it. The absence of both demand and storage space sent oil prices into negative territory on Monday.

The oil tankers stranded off the Gulf coast, each carrying about 5,000 barrels of fuel, are losing up to $30,000 a day because they cannot unload and get back to work, according to petroleum sector experts cited by Milenio.

Source: Milenio (sp) 

Mr. Rogers provides good counsel to deal with things like coronavirus

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Mr. Rogers: positive, masculine energy.
Mr. Rogers: positive, masculine energy.

I’ve been a fan of Mr. Rogers since I can remember. My mother told me that I used to talk to him when I watched his show (not something that I remember — I must have been a toddler!) — and his gentle, kind demeanor became a blueprint for me of what truly positive masculine energy could be.

There’s been renewed interest in Mr. Rogers lately. Tom Hanks recently played him in A Beautiful Day in the Neighborhood, and the documentary Won’t You Be My Neighbor? about his life, career, and philosophy came out the year before.

So why I am talking about Mr. Rogers? Because his are the lessons, simply put, that remind us to be our higher selves, even in times of pain and uncertainty; indeed, especially in times of pain and uncertainty. The coronavirus crisis certainly counts as one of those times, and as a result we’ve seen plenty of people, governments, and businesses behaving shamefully out of both fear and ignorance.

All over the world, cases of domestic violence are up as people are essentially locked into small spaces with their abusers. In an eerie echo of conspiracy theorists and science deniers in the United States, one widely watched TV host insisted to the public that the Covid-19 statistics were false and should be ignored.

Healthcare workers, in addition to the high risk to their lives at work, have been attacked in the streets as supposed “disease carriers.” Workers who live day to day aren’t sure how they’re going to survive, the economy is expected to continue its sharp contraction, and criminal gang violence does not seem to have slowed as a result of the pandemic. Though our president has assured the public that there will be enough ventilators for everyone that needs one, many health workers have made it known that they are facing dire shortages of protective equipment for themselves.

Shortage of bad news, there is not.

But as Mr. Rogers reminds us to do during hard times, especially when we’re scared: look for the helpers.

Though we’d certainly have preferred not to face all of this upheaval, there is much goodness to be seen, had, and acted upon. A crisis is a chance for people to show their altruism. It’s a chance to care for others in ways that we often get too busy to think of, much less carry out. It’s a chance to remember our common humanity, and to remember that, though the capitalist zeitgeist of the times says otherwise, we all need each other.

So what’s happening out there that’s good?

Hotel Fénix in Guadalajara pivoted its business to sell and deliver tamales, making extra to donate to health workers and patients’ families. By doing this, they’re keeping their staff employed and helping those in need. The owner has said he will continue doing this even after the crisis has passed.

Taquería los Pastorcitos in Mexico City decided that, despite the struggle to make money, they would simply give tacos away to those in need. They put up a touching banner in front: Its not going well for us either, but at least we can give you a few taquitos.”

In my favorite story of the week, unemployed mariachis gathered to serenade hospital workers in Acapulco to show their appreciation for their work (they could have stood a bit farther apart from each other, but still). It was a touching show of affection and solidarity.

In the absence of the normal hustle and bustle of human industry and activity, Mother Nature is also getting a well-deserved moment in the sun, so to speak. This year for Semana Santa, it was the crocodiles that got to enjoy some beach time.

Keep your eye on the regular people who perform both small and large heroic acts every day: the family members who care for children and the elderly, the healthcare workers who continue to go to work everyday despite the very real danger to their own lives, the teachers making an effort to ensure their students keep learning despite the quarantine. The trash collectors keep coming, the supermarket workers continue to report for duty, the bus drivers continue on their routes.

When he sees someone worse off than he is, my dad will say, “There but for the grace of God go I.” Despite one’s religious or spiritual beliefs, it’s a good reminder: no human is invincible, and none of us can get through this life without others.

Let’s keep helping each other, and maybe, if we can really keep this basic fact in the front of our minds, we can create something better than what we had before for all of us.

Sarah DeVries writes from her home in Xalapa, Veracruz.

6 arrests in Jalisco on first day of new isolation measures

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Authorities in Jalisco are checking the temperature of travelers entering the state.
Authorities in Jalisco are checking the temperature of travelers entering the state.

Police in Jalisco arrested six people and turned back six others attempting to drive into the state on the first day of a new obligatory quarantine period.

Governor Enrique Alfaro Ramírez said that Monday’s arrests were made in San Pedro Tlaquepaque and Tlajomulco de Zúñiga. In the former, police arrested five people drinking in public who insulted the officers when they were asked to go home.

Police in Tlajomulco were forced to arrest a man waiting for public transport after he became aggressive when the officers asked him to wear a face mask.

As for the motorists turned away at the state border, Ramírez said they were denied entry into Jalisco because they were running fevers when examined by health professionals at highway checkpoints. All were from the Valley of México.

Jalisco isn’t the only state that has experienced growing pains upon initiating stricter Covid-19 mitigation measures. Authorities in Sonora meted out 130 fines on that state’s first day of mandatory lockdown on April 13.

Meanwhile, other states are also toughening up actions to slow the spread of Covid-19. Aguascalientes Governor Martín Orozco Sandoval announced a broadening of preventative measures, including the mandatory use of face masks in public beginning on Friday.

Police will use fines and arrests against people who do not comply. The fines will range as high as 80,000 pesos (US $3,254) depending on the severity of the infraction.

The governor also said the state Health Ministry will create a medical brigade to accompany police on monitoring operations to convince violators to return to their homes.

Health authorities will also carry out sanitation operations in the markets and public transportation facilities in the state’s 11 municipalities.

Source: El Universal (sp)

ln the times of Covid-19, supermarket shopping a new experience

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Grocery shopping in the midst of the pandemic has become a totally new experience, the newspaper Milenio reported after visiting several supermarkets in and around Mexico City to check out the social distancing and hygiene measures they are taking to prevent the spread of the coronavirus. 

At Sam’s Club in Cuemanco, customers are greeted by a worker who applies antibacterial gel to their hands and only allows one person per membership to enter. 

Aisles are mostly empty of shoppers due to the limited access, and workers all wear masks. At checkout, cashiers make sure customers respect social distancing and are not permitted to approach the cashier until the person in front of them has finished paying. If they are being greeted by the usual friendly smile, it’s impossible to see underneath the masks. 

The situation is similar at Superama in Portales Sur. Only one person per family can enter the store, and a woman wearing a mask and gloves wipes down the shopping carts with an alcohol-soaked cloth. 

Gone are the tongs and trays customers usually use to select products from the bakery. Today, loaves of bread and pastries are individually wrapped in cellophane. 

Online shopping has become increasingly popular, and supermarket workers push carts through the aisles filling customers’ orders. 

At checkout, taped marks on the floor help customers maintain distance from one another while waiting their turn. Cashiers wearing masks greet customers from behind a clear plastic barrier, and there are no baggers to pack groceries. As most are elderly, they have been sent home to wait out the pandemic. 

At Santa Fe’s Bodega Aurrerá, despite stay-at-home orders, several families congregate at the entrance, waiting for their one family member who has been allowed entry to tackle the shopping on his or her own. Police officers wearing masks and gloves make sure this policy is adhered to. 

Inside the store, workers wearing protective gear spray the handles of shopping carts with disinfectant. Again, taped marks on the floor at checkout areas keep customers at a safe distance.  

At the Eduardo Molina Afuera Walmart, capacity has been reduced from 3,000 shoppers to 1,400, and a sign tells customers they must remain 2.25 meters away from others.

At Sam’s Club in Coacalco, shopping rules are blasted over large speakers before shoppers, one per family, enter the store. Aisles are eerily empty and signs are placed in front of essential items where purchase amounts have been limited.

At Híper Soriana in the Los Ángeles neighborhood, shopping conditions are less than ideal. Still, customers must wait for a shopper to leave the store before they can enter, and a bottle of hand sanitizer sits on a table at the entrance for customers to use, should they choose to do so. However, shelves where rice, beans, pasta and soup should be are empty, and the floors at checkout are taped but few people pay the recommended distance any regard.

While efforts are being made to make shopping a safer experience, albeit a strange one, it’s up to customers themselves to make sure they abide by guidelines and do their part to flatten the curve. 

Source: Milenio (sp)

Airbnb hosts to offer free accommodation to frontline healthcare workers

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airbnb and red cross

The online vacation rental platform Airbnb has announced that it will provide free accommodation in the homes of volunteer hosts to health workers treating patients with Covid-19.

The company’s Frontline Stays program is working with the Mexican Red Cross to provide medical personnel with convenient and comfortable places to stay so they can focus their attention and efforts on saving lives.

Red Cross President Fernando Suinaga Cárdenas praised the “dedication, professionalism, commitment and spirit of service” of frontline medical workers and said that the alliance with Airbnb is a way to show them gratitude and support.

“We are infinitely grateful to Airbnb and its hosts for being in solidarity with all the frontline responders who are dedicating each day of their lives to fight against Covid-19,” he said.

Available accommodations include entire houses with independent entrances, as well as individual rooms in boutique hotels. Airbnb is offering hosts who volunteer as much as US $50 as a cleaning subsidy.

Guests will be obliged to follow strict safety requirements ranging from observing enhanced cleaning procedures to practicing physical distancing to allowing for a 72-hour buffer period between stays.

For its part, Airbnb expressed its gratitude to its hosts who are risking their personal safety and space to help respond to the crisis.

“The Mexican Airbnb hosts are the ones who have once again demonstrated their solidarity and generosity in times of need,” said Ángel Terral, the company’s country manager for Mexico, Central America and the Caribbean. “They are the heroes who are opening their spaces to help out in times of need.”

The Frontline Stays program is already putting up health workers in Spain, France, Italy, the United Kingdom, the Philippines, Malaysia and the United States. The cities of New York, Los Angeles and New Orleans have experienced severe outbreaks that have attracted doctors and nurses from around the country to help out.

Suinaga expressed hope that the program will be effective in helping efforts to combat the coronavirus outbreak in Mexico.

“Mexicans have always shown that by joining efforts and being in solidarity we succeed,” he said. “I am sure this will be no exception.”

Mexico News Daily

Bank cuts interest rate, announces US $31-billion economic stimulus

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bank of mexico

The Bank of México cut its benchmark interest rate by 50 basis points on Tuesday and announced 750 billion pesos (US $30.5 billion) in support for the financial system to help the economy weather the coronavirus-fueled downturn.

In a widely-anticipated move, the five members of the central bank’s board voted unanimously to lower the overnight interbank rate to 6%. The out-of-cycle cut came a month after the bank lowered its benchmark rate to 6.5%.

Goldman Sachs economist Alberto Ramos and Marco Oviedo of Barclays are both predicting that Banxico, as the central bank is known, will make further cuts this year to leave the benchmark rate at 4.5% at the end of 2020.

Banxico said that its rate cut and the 750-billion-peso support package – Mexico’s most momentous move yet to support the ailing economy – will “foster an orderly behavior of financial markets, strengthen the credit channels and provide liquidity for the sound development of the financial system.”

Along with measures already announced, the support is equivalent to 3.3% of Mexico’s GDP in 2019.

Banxico said that commercial and development banks will be able to access a 250-billion-peso fund to boost their lending to small and medium-sized businesses as well as individual borrowers.

The central bank also said that it would add hedge transactions settled by differences in United States dollars to its foreign exchange intervention armory in order to “provide orderly operating conditions in the MXN/USD exchange market, particularly during Asia and Europe trading.”

Finance Minister Arturo Herrera, who attended Tuesday’s Banxico board meeting, said on Twitter that the government is working with the central bank “to permit the operation of currency hedges 24/7 and reduce the volatility of our currency.”

The Mexican peso, one of the most traded emerging market currencies, has been hit hard by the coronavirus pandemic as investors abandon it in favor of safe-haven currencies, especially the US dollar. It was trading on Wednesday morning at about 24.6 to the dollar.

The coronavirus crisis is predicted to take a heavy toll on the Mexican economy, which was in recession even before the first case of Covid-19 was reported in Wuhan, China, in late December.

Banxico said on Tuesday that GDP could shrink by 5% in the first half of 2020 compared to the first six months of last year.

The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) and the financial institution Citibanamex also updated their forecasts on Tuesday, predicting that the Mexican economy will contract by 6.5% and 9%, respectively, this year.

The Business Coordinating Council (CCE), an umbrella organization made up of 12 prominent business groups, has warned that the economy could contract by 7% this year if the government doesn’t ramp up support. It has also said that between 1 million and 1.2 million jobs could be lost.

While the CCE has been critical of the government’s economic response to the coronavirus crisis, it praised the measures announced by the central bank on Tuesday.

“With this policy response, the Bank of México is contributing with its tools to the relief of the national situation,” the council said, adding that it had asserted its autonomy from the government.

Joel Virgen, chief Mexico economist for French bank BNP Paribas, said that the central bank was compelled to respond forcefully to the economic crisis with monetary policy because the government has failed to do so with fiscal policy.

“Context is key; up to this point Mexico’s fiscal effort has been timid in absolute terms and also in relative terms if we compare it with its Latin American peers. This context definitely played [a role] in Banxico’s decision to act more decisively,” he said.

Source: Reuters (en), El Financiero (sp)