Mexico’s central bank cut its benchmark lending rate 25 basis points to 9.5 percent after inflation fell. The reduction is a first step in reversing 12 interest-rate increases through March that slowed economic growth in Latin America’s largest economy. Mexico´s annual inflation rate through mid-August was 4.1 percent. The core inflation rate, which excludes costs of energy and fresh foods, fell to 3.35 percent.
Category: Regions
Posted inDaily Brief
Mexico: Bank Profits Soar
The combined net profit of banks operating in Mexico soared by 89 percent year-on-year to $2.24 billion in the second quarter. The total assets of the Mexican financial sector were up 3 percent to $196 billion, equal to 28 percent of the country´s GDP. The banking sector’s default rate stood at 2.3 percent.
Posted inDaily Brief
Deal Struck in Ecuador
Protesters who had shut down Ecuador´s oil exports struck a deal with energy companies under which they will end their attacks in exchange for the firms’ boosting investment in the poor communities where they operate. Oil companies such as Occidental Petroleum, Petrobras and EnCana are to pave 160 miles of new roads in the Amazon provinces of Sucumbios and Orellana. About two-thirds of the 25 percent income tax paid by the companies is to be steered toward local health, environment and development projects.
Posted inDaily Brief
Telmex Continues Buying Spree
Telefonos de Mexico, Latin America’s biggest fixed-line telephone company, agreed to buy a majority stake in Colombia Telecomunicaciones from the Colombian government for $350 million. Telmex, controlled by tycoon Carlos Slim, will pay cash and stock for 50 percent plus one share of Colombia Telecom. Earlier this month Slim spent $1 billion to buy cellular carriers in Chile and Peru.
Posted inDaily Brief
Ecuador Wants Grace Period
Ecuador has asked for a grace period of six months before starting to pay for 660,000 barrels of crude oil to be supplied by Venezuela. State-owned firm Petroecuador had to suspend its oil exports last Thursday due to a protest in two oil-rich provinces in the Amazon. The energy ministry says crude oil production has returned to 84 percent of normal.
Posted inDaily Brief
Mexico: Central Bank Rejects Bids
Mexico’s central bank rejected banks’ bids to drive down interest rates in a daily auction Thursday, signaling it may hold off on cutting the benchmark lending rate at a policy meeting Friday. Banco de Mexico turned down bids by banks to borrow for 12 days at 9.5 percent, but accepted 2.5 billion pesos of bids to borrow for 12 days at a rate of 9.75 percent.
Posted inDaily Brief
Telefonica Moviles Mexico Appoints Chairman
Miguel Menchen Alumbreros, who worked as executive director for Telefonica Moviles in Spain and Morocco, has been appointed chairman of Telefonica Moviles Mexico. Jose Moles, who resigned in September, will assume Telefonica CTC´s chairmanship in Chile. Telefonica Moviles has a 14 percent market share in Mexico, with 5.8 million clients.
Posted inDaily Brief
S&P May Cut Ecuador´s Rating
Standard & Poor’s warned it may cut Ecuador’s ‘CCC+’ long-term sovereign credit rating as heightened political risk increases doubts over the country’s ability to pay its debts. Protesters last week crippled the country’s oil industry and helped jack up petroleum prices by dynamiting pipelines and vandalizing pumping equipment at installations of state-owned Petroecuador in the eastern part of the country. The Ecuadorean army has moved into the area and the government is working to get crude production back on-line.
Posted inDaily Brief
Mexican Exports Fall
Mexico’s exports fell 8.8 percent in July from the previous month to $16.5 billion as US automakers curbed production at their Mexican factories. The country´s trade deficit rose to $620 million. The export data comes after Mexico´s GDP expanded a less-than-expected 3.1 percent in the second quarter, a seasonally adjusted decline of 0.42 percent. The country’s industrial output growth slowed more than expected in June, rising 0.7 percent from the year-earlier period.
Posted inDaily Brief
Pemex Finishes Plants
State-owned oil giant Petroleos Mexicanos completed construction of two natural gas processing plants in Cuenca de Burgos. The plants cost $166 million to produce and will help double the firm´s daily natural gas processing capacity from 400 to 800 million cubic feet.