Mexico prepares contingency plan in case Trump wins
Central Bank Gov. Agustín Carstens said officials are looking at ways to handle any financial or economic fallout from a victory by the Republican candidate
Mexico is preparing a contingency plan in the
event Donald Trump wins the US presidential election, said
Central Bank Governor Agustín Carstens.
"If the adverse situation plays out, Mexican
authorities will respond in some way," Carstens said on
Wednesday during an interview on Milenio Televisión.
"We’re discussing a contingency plan with the
Finance Ministry [but] we hope we won’t have to
Carstens, who has said a Trump victory would hit
Mexico like a "hurricane," did not mention the Republican
nominee by name in the interview. He said Mexican authorities
were also bracing for market volatility regardless if Trump or
Hillary Clinton emerges as the winner.
"Whatever the outcome, and we hope it will be a
positive one, although it could be negative, we, the
authorities, would need to adjust our policy position if
needed," he said. Carstens did not provide any specifics about
the contingency plan.
The Mexican peso has seen volatile trading in
recent weeks and fallen sharply over the last several days as
some polls in the US showed the race for the presidency
tightening. On Thursday, the peso broke two days of losses
after two new polls showed Clinton holding a slight edge over
Trump has repeatedly attacked Mexico on the
campaign trail and vowed to renegotiate trade deals that could
mean higher tariffs for Mexican exports.
"The United States is our leading trade partner;
80% of our exports go there," Carstens said. "Any change in
that would have a very important impact. If the next US
administration implements protectionist policies, it would have
an adverse effect on us."
Mexico’s central bank, or Banxico,
has raised interest rates to
shore up the peso but has held off on selling dollars in the
foreign exchange market since earlier this year.
Finance Minister José Antonio Meade told
Televisa on Wednesday that officials are monitoring the market
but he added that it did not make make sense to intervene for
now, saying it would be like "throwing drops of water into the
Carstens said the central bank was focused on
keeping Mexico’s inflation rate around 3%. "We
have to take care that inflation does not go above 3%," he