Mexico blames peso's slide on economic pessimism

Mexican Minister of Finance Jose Antonio Meade on Thursday blamed the country's currency devaluation on "pessimism" over the economic outlook.

The peso continued to slide against the U.S. dollar, reaching 21.89 to one.

"Today, the exchange rate reflects a very pessimistic scenario regarding our capacity to attract investment," Meade said at a seminar on the 2017 Economic Outlook, organized by the Autonomous Technological Institute of Mexico (ITAM).

"Once the uncertainty dissipates, conditions will improve," Meade said.

Those uncertainties, however, may persist and the situation may deteriorate, as credit agency Moody's noted on Thursday.

In a report, the agency said how well Mexico's business sector fares in the coming year will largely depend on the incoming administration of U.S. president-elect Donald Trump, who aims to renegotiate a free-trade agreement with Mexico and impose import tariffs.

"Mexico is attractive (for investors) today and it will continue to be, due to its capacity generated by foreign direct investment," said Meade.

"There are investments that are being postponed due to the uncertainty that we are reflecting under trade ties" with the United States, added Meade.

U.S. automaker Ford announced earlier this month that it was cancelling plans for a new 1.6 billion U.S.-dollar plant in Mexico.
 

source: Xinhua