The Envy of the Region

Mar 1, 2002

Guillermo Ortíz is not a popular man, not that he cares much. For the thick-skinned Ortíz, governor of Mexico's central bank and hardline inflation hawk, his victory last year when he got inflation under his 2001 and 2002 targets, was particularly sweet. Although the business community, especially exporters, revile him for pushing up the value of the peso, Ortíz's war against inflation was one important reason for Standard&Poor's decision in February to finally raise Mexico to investment-grade status, nearly a year after Moody's had first taken the plunge.

Mexico posted its fourth consecutive year of declining inflation in 2001. At 4.4%, last year's inflation rate came in below the Central Bank's 6.5% target and below its 2002 target of 4.5%. This puts Mexico well on track to meet its 2003 goal of cutting inflation to the same level as the US, its largest trading partner. Ortíz says,...

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management