Exclusive: Mexico's Diaz de Leon says peso risks require prudent policy
FILE PHOTO: Mexico's central Bank Governor Alejandro Diaz de Leon Carrillo speaks during an interview with Reuters on the sidelines of the Mexican Banking Association's annual convention in Acapulco, Mexico March 9, 2018. REUTERS/Henry Romero
MEXICO CITY: Mexico's central bank needs to stick to a prudent monetary policy for now, even with a recent drop in inflation, due to the risks of a deeper peso slump, Central Bank Governor Alejandro Diaz de Leon said late Monday.Diaz de Leon told Reuters the peso faced risks from broad dollar strength, as well as uncertainty over Mexico's trade talks with the United States and the outcome of the July 1 presidential vote in Latin America's second biggest economy.
"There is uncertainty about what can happen and it has been important to have a prudent, cautious monetary stance that contributes, in the first place, to inflation returning to its three percent target - and it is doing that - and, secondly, that there is an orderly adjustment in the markets," he said.Diaz de Leon said policymakers would consider taking action to support the peso if there were signs that liquidity "was compromised," but he said so far this year the peso's losses had occurred in "deep" markets.(Reporting by Michael O'Boyle and Ana Isabel Martinez; Editing by Nick Zieminski)
Source : http://www.channelnewsasia.com/news/business/exclusive--mexico-s-diaz-de-leon-says-peso-risks-require-prudent-policy-10287166