Mexico City, Oct 17 (IANS) The recent pressure on the value of the Mexican peso is, at least in part, due to the uncertainty surrounding the NAFTA renegotiations, said Finance Minister Jose Antonio Meade.
“The markets consider that, in the absence of a treaty, there has be a real adjustment in the exchange rate, which pressures us in consequence,” Xinhua quoted Meade as saying at a business forum on Monday.
The Mexican peso opened on Monday at a high of 19.09 pesos to the USD, its highest rate in five months.
Another factor making investors nervous in Mexico is the expectation of a normalization of US monetary policy.
“Faced with these two elements that come from outside, what we can do is trying to exercise internal control. What we have…is the ability to steady our fiscal policy,” he added.
Concerning the North American Free Trade Agreement (NAFTA), Meade said the Mexican government’s central objective is to secure a good renegotiation, calling the differences between the US, Canada and Mexico as part of a “normal process”.
The fourth round of NAFTA talks is currently being held in the US, with differences beginning to become more pronounced.
Mexican Economy Minister Ildefonso Guajardo admitted earlier on Friday that conversations were going through a difficult time.
The US government is seeking to update the NAFTA, in force since 1994, with a number of demands, including a five-year expiration clause, the scrapping of a chapter on dispute resolution, and an increasing in rules of origin for the automotive and textile industries which Mexico and Canada oppose.