Moody’s rating agency has lowered Mexico’s credit foresight from “stable” to “negative”, due to a weak economic performance from Mexico, a complicated external environment and the possibility of new obligations in case it decides to support wobbling state-owned oil company Pemex.
As a result of this news, the Mexican currency was affected, with the peso falling 8.10 cents and opting to erase its gains. Before the announcement from Moody’s, Mexico’s Central Bank (Banxico) had reported 17.29 units in relation to the dollar, after reaching a minimum of 17.13 units for currency exchange. At bank counters and exchange offices the dollar sold at 17.60 pesos, according to data from Banamex.
For its part, the Mexican Stock Exchange went from 327.24 points at midday –0.69 percent less than its previous level– to 45,870.71 units in the Pricing and Trading Index (IPC). According to analysts, the market shows negative movements due to expectation of relevant economic data on United States employment due to be known tomorrow.
Moody’s ratified its “A3” rating from Mexico’s government, but said at the same time the country faced challenges to reach its goals for fiscal consolidation and the stabilizing of its debt rates.
New obligations in the form of a possible government support of Pemex, given the pressures of liquidity of the state-owned oil company, could further weaken the process of fiscal consolidation.”
-Moody’s, rating agency.