Mexican Central Bank Hikes Rate After Trump Win

Mexican central bank hikes rate after Trump win

MEXICO CITY, (Pakistan Point News - APP - 18th Nov, 2016 ) : Mexico's central bank raised its key interest rate on Thursday after Donald Trump's US presidential election victory last week rocked the peso and global markets. The bank lifted the rate by 50 basis points to 5.25 percent, saying in a statement that the election "led to an increase in volatility in financial markets of every region." The Mexican Currency broke the psychological barriers of 20 and 21 pesos to the Dollar last week on fears that Trump's protectionist policies would hit the country hard.

The peso regained some ground this week, trading at 20.60 late Wednesday. Trump has unnerved investors with his plan to renegotiate or scrap the North American Free Trade Agreement (NAFTA), a three-nation pact between the United States, Canada and Mexico. He has also threatened to curb a major source of revenue for Mexico by cutting off remittances sent by immigrants to their families in order to strong-arm Mexico into financing the construction of a border wall.