October 3, 2018 | Charles Newbery
Despite external and internal political and economic challenges, Mexico’s central bank has kept inflation on a steady course
In Latin America, central bankers haven’t had it easy over the past year. A succession of hikes in US interest rates, a stronger dollar and an escalating trade war have spurred capital flight from the region, putting pressure on currencies and inflation.
Mexico took the brunt of it — and more. It had a presidential election this year, and last year a major earthquake and a surge in energy prices.
By all accounts, the Mexican peso could have at any point crashed like Argentina’s, says AJ Mediratta, president of New York-based Greylock Capital Management. “But it didn’t.”
Instead, the peso appreciated this year, gaining 1.6% in the first three quarters of 2018. Argentina’s, by comparison,