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UPDATE 1-Reuters Summit-Mexico Fin Min says not worried by peso volatility
May 30, 2012 / 7:53 PM / 5 years ago

UPDATE 1-Reuters Summit-Mexico Fin Min says not worried by peso volatility

(Adds details, quote)

MEXICO CITY, May 30 (Reuters) - Mexico’s Finance Minister Jose Antonio Meade said on Wednesday he was not worried by recent volatility in the peso, which has fallen significantly against the dollar in recent weeks.

“It’s been in a market that’s still functioning well, in a market that’s deep and liquid, which is not distorted, which is reacting to an environment of significant uncertainty,” Meade said of the currency’s swings in an interview with Reuters.

Since mid-March, the peso has fallen by more than 11 percent against the dollar, shaken by turbulence emanating from the euro zone’s sovereign debt crisis.

On Wednesday, the peso dropped by as much as 1.66 percent against the dollar, rocked by fresh worries over Europe.

The health of Spanish banks has been at the forefront of investor concerns over the past few days, and Meade was adamant this would not spill over to affect Mexico.

A number of Mexico’s biggest banks are Spanish-owned and Meade said they were well capitalized. He did not expect there to be any contagion from Spain.

Mexico’s forecast for economic growth of 3.5 percent this year was “well anchored” Meade said, adding that he did not see much room for fiscal stimulus in Latin America’s second biggest economy. If the country did end up needing a boost, it was more likely to take the form of monetary stimulus, Meade said. (Reporting by Michael O‘Boyle, Krista Hughes, Ana Isabel Martinez and Luis Rojas; Editing by Chizu Nomiyama and Andrew Hay)

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