On Wednesday, Bank of Mexico's Governor and IMFC Chairman Agustin Carstens said that the country is now preparing contigency plans for a possible "adverse" result of the US presidential elections.
In his interview with Milenio television, he said "If the adverse situation materializes it's foreseeable that the Mexican authorities respond in some way. It's a contingency plan that we're discussing with the Finance Ministry. We hope we don't have to use it.
Carstens has earlier remarked in previous interviews that should Donald Trump win, Mexico will be facing adverse problems that may put the market in a volatile state. Trump, in his campaigns, said that he will tear up a trade deal with Mexico, build a massive border wall to stop illegal migrants from Mexico from entering and continue his attacks on US investors in Mexico. These threats have already made an impact, creating problems for the country's currency, peso.
He also added that monetary policy could change depending on the US election results and would possibly enable the country to stop the possibility of increasing rates once the US rate hike is imposed. He also said that the central bank will be aiming to maintain the Mexican inflation rate up to 3% as it will allow them to go forward.
At the same time as Carstens' interview, senior officials from the Bank of Mexico and the Finance and Economic Ministry were already starting negotiations for their contingency plans regardless on who wins the elections.
Finance Minister Jose Antonio Meade also remarked on Wednesday that creating an intervention in the current market is difficult especially if the reason why it is currently unstable is because of global issues. Any action would be rendered ineffective.
