The Stability Dividend
Vicente Fox promised radical reforms to restructure the economy - then failed to deliver. Despite political disarray, Mexico's financial system keeps growing.
It has been 16 years since Mexico began
its conversion from an inward-looking, state-dominated economy
to an open, market-driven system. Under President Vicente Fox,
many promised reforms have fallen by the wayside, yet policy
consistency and economic stability have transformed Mexico's
The country's financial system is unrecognizable from the
corrupt system that collapsed in the wake of the December 1994
In the years since, a series of technocratic reforms has
allowed the markets to flourish. The Central Bank, which was
given independence as part of the reforms, is attempting to
keep inflation within its official target range of 2% to 4% for
the second year running. Interest rates on Cetes, 28-day
government paper, touched a historic low of 4.25% earlier this
year. The Finance Ministry, known as Hacienda, is paying down
Mexico's external debt year by year, aided by an
investment-grade rating. This year's budget...
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