The head of Mexico’s Business Coordinating Council called on the Bank of Mexico to lower interest rates to relieve pressure on exporters caused by a strong peso. Speaking at an event during Mexico Investment Week in New York, Jose Medina Mora warned that foreign-exchange strength is hurting key sectors of the domestic economy. The currency has strengthened 3 percent over the last three months, trading near its strongest level in two years.
Pressure on exporters
Medina Mora, president of the Consejo Coordinador Empresarial, said exporting with an exchange rate below 17 pesos per dollar is tremendously difficult. Mexican exports continue to grow despite the currency strength, which Medina Mora credited to the performance of local companies.
The peso gained 3 percent recently.
He argued that policy conditions now justify rate cuts because inflation has moved into an acceptable zone. Medina Mora noted that the exchange rate hits exports very hard and damages tourism, urging the central bank to act because inflation is within a controlled and controllable range.
Carry trade and trade outlook
Carry-trade operators have favored Mexico over Colombia and Brazil, channeling capital flows that have supported the Mexican peso. Banxico faces these business lobby demands as international financial flows keep the currency close to its two-year highs.
Cross-border trade issues also remain central to the business outlook. Mexico expects the United States to reduce auto and aluminum tariffs by the end of 2026.
Related: Mexican peso gains 0.21% on asset demand ahead of policy signals · Peso opens at 17 per dollar as traders reset rate bets
Source: Bank of Mexico
