Delay in USMCA ratification could hurt Mexican economy: Stability Council

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Delay in USMCA ratification could hurt Mexican economy: Stability Council

On Friday, the 27th of September 2019, Mexico’s stability council had revealed a report saying that the potential hold-up of a ratification of USMCA (US-Mexico-Canada free trade pact) that replaced a NAFTA trade deal last year, could pose substantial scale of menace to Mexico’s financial markets On top of that, the Mexican Stability Council had also shed lights on potential downgrading of credit rating of its state-owned oil firm Pemex, which had been a whisker away from a junk status after losing investment-grade status earlier this year.

Aside from that, another downgrading of Mexico’s state-backed oil firm Pemex would likely to start off a series of sell-off of the South America’s second-largest economy’s sovereign bond which in effect could result in a collapse of Mexico’s financial markets amid trade rows over aluminium and steel taxation with the United States, Mexico’s financial stability council reported on Friday (September 27th).

Besides, the council had also been quoted saying in its Friday’s (September 27th) report that it had been closely monitoring latest repercussions of Sino-US trade tensions alongside a no-deal Brexit, both of which were accused of forging the global economy towards a near-term recession risk, appeared to be inevitable for the moment being.

In the wake of such withering financial milieu, Mexico’s financial stability council had flagged a stringent tone for a strategically solid macroeconomic policy, price stability alongside fiscal discipline in its Friday’s (September 27th) report.