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2006 News Releases
For immediate release:
June 20, 2006
Media contact:
James Hoard
Phone: (214) 922-5307
e-mail: james.hoard@dal.frb.org
Dallas Fed’s
Economic Letter Examines Mexico’s Vulnerability
to Financial Crises
DALLAS—Solid macroeconomic
discipline and improved debt management on the part of
Mexico’s government have reduced the likelihood
of an election-year financial shock, according to the
June issue of the Federal Reserve Bank of Dallas’
Economic Letter.
In “Mexico’s Financial
Vulnerability: Then and Now,” senior economist
Erwan Quintin and economic analyst José Joaquín
López state that while Mexico has suffered financial
setbacks during three of the past five presidential
elections, positive steps such as the establishment
of a truly independent central bank have put Mexico
on more solid financial footing.
“With a clearly stated objective
and constitutional protection, Banco de México
has become a no-nonsense practitioner of inflation targeting,”
the authors write.
The Mexican government also has
reduced budget deficits and short-term borrowing, according
to the authors. In addition, monetary authorities in
Mexico no longer try to support a fixed value of the
peso.
Despite these positive steps,
the authors find that deep structural reforms remain
needed in Mexico.
The June 2006 issue of Economic
Letter can be found at www.dallasfed.org.
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