In six months Mexico’s Peso rises to the maximum
Peso of Mexico rose to the maximum in more than six months after Mr. Jose who is the Health Minister of Mexico said that the affect of swine flu has increased. This has strengthened the hope that with the reopening of the business the economy will get better. The Peso rose to 13.2338 which is a climb of 4.1 percent. Since October 13 this was Peso’s highest and it also registered the highest in opposition to the dollar amongst the sixteen of the world’s best currencies.
Mr. Salvador who is the head of the fixed-income planning at Banco Santander SA in Mexico City said that the fact cannot be denied that the country’s economy will get better and this will also be good for the Peso.
Mr. Jose said that though the swine flu has been responsible for 25 deaths but now its affects are decreasing. In a television interview the President of Mexico Mr. Felipe said that the exact loss by the outbreak of swine flu can not be yet calculated, but economy’s some parts will make progress very soon and this week the situation will again become normal. The rally of Peso removed last week’s downfall of 3.1 percent which was encouraged by the outburst of swine flu and it would also affect the economy.
Mr. Dirk and Mr. Chandran of Citigroup Inc. in a report have suggested the investors to purchase the Mexican currency in opposition to the dollar. They also said that it appears that swine flu has gone. As per a survey from a bank, the economists believed that the Peso will become weak this year as compared to their earlier expectation. By the end of the year 2009 the Peso will fall to 13.64 per dollar as compared to the earlier estimate of 14.24.
This survey also concluded that this year GDP (Gross Domestic Product) will come down by four percent. The early prediction by the economists forecasted that the economy would come down by 3.2 percent. Mr. Gabriel (chief economist for Mexico and Chile at UBS AG) in a note to the clients wrote that the economists might just decrease their GDP prediction in the next month survey keeping in mind the outbreak of swine flu.
Mr. Agustin who is the Finance Minister made an approximation last week that the fear of swine flu might decrease GDP by 0.2 percent in the year 2009. According to a statement made by Mexico’s finance ministry that Mexico might have to face a downfall of 2.7 percent with the slump in America. According to the ministry, in the first quarter Mexico probably shrank six percent which is a major quarterly downfall in six years.
At a local auction Banco de Mexico purchased pesos worth hundred million dollars. Since October it has reportedly spent $23.4 billion to support Peso from its foreign reserves.