“There we are resisting”: López Obrador said that the Mexican economy is shielded from financial crisis

The president of Mexico, Andrés Manuel López Obrador, said Tuesday at a press conference that the Mexican currency resisted the so-called “black Monday”, which recorded the fall of markets around the world; In addition to that, he said, the country has healthy finances which helps to “shield us.”

“There we are resisting, yesterday I commented that we have healthy public finances, That helps us a lot because we managed to give ourselves, we didn’t spend more than we have income, we didn’t borrow from the country, for the first time the public debt did not grow, on the contrary, a little but low, the amount of the reserves grew by 10,000 million dollars ”, andexplained the Mexican president.

López Obrador said that yesterday was a “complicated” day for international markets due to the fall of the financial system, and continues to this day; But he said, the Mexican peso is one of the currencies that “endured.”

“He resisted our weightBecause it was complicated, it is still complicated, but yesterday was a bad day. All the world’s stock markets were affected, the entire financial system fell, all currencies depreciated and ours resisted, I endure and I hope that the weight will be strengthened. ”

The head of the Executive explained that they have the conditions to resist the international crisis, also indicated that he will ask the Secretary of the Treasury, Arturo Herrera, report on the economic situation of the country.

“We have conditions so that we can resist this crisis situation, derived basically from the founded and unfounded fears about the coronavirus and the differences that are being generated by the production of oil between Russia and Saudi Arabia, Then we will wait and today the Secretary of the Treasury informs them. I asked him to ask the Secretary of the Treasury to inform them, to see if it is possible today, about the financial economic situation of the country, ”said López Obrador.

After the heavy losses on Black Monday in the markets, driven by the coronavirus epidemic and the sharp drop in oil prices, world stock markets begin to recover, although investors’ expectations of government measures are maintained and the dispute between Russia and Saudi Arabia over the supply of crude.

The Mexican peso depreciated on Tuesday for the sixth session despite an uptick in the price of oil and the Mexican Exchange Commission announced on the eve an increase in the amount of its exchange hedges program to cope with the sharp fall in the currency.

Arturo Herrera, head of the Ministry of Finance, said Tuesday that the Mexican government’s oil revenues are “Fully covered”, despite the fall in international oil prices, with insurance contracted in the international market. ”

The official said that the oil coverage program that the government has contracted for several years aims to ensure that the government will have the resources established in the budget program.

“It is expensive insurance, but it is fair insurance for occasions like this. We will not have a direct impact on the budget ”, he said in an interview with the Televisa network.

The local currency was trading at 20.9380 per dollar, with a loss of 0.74% compared to 20.7840 pesos of the Reuters reference price on Monday.

The The Mexican peso had one of its worst days in the last three years yesterday and closed on Monday with a sharp drop of 5.3% after the collapse of oil prices and due to fears about the dispersion of COVID-19, situations that also impacted the Mexican stock exchange, what he had one of his worst days in more than a decade.

The National currency closed Monday at 21.18 per dollar, its worst level since the election of Donald Trump as president in November 2016. The US currency exceeded, at a time in the morning, the 22 peso barrier.

For its part, the Mexican Stock Exchange had its worst fall of 6.4%, since October 2008, when the last major international economic crisis occurred, and it was spread from the rest of the stock exchanges around the world, which have suffered similar losses in recent days, particularly in this beginning of the week.

The BMV lost more than 2,500 points. For its part, the Price and Quotation Index (CPI) fell 6.42%, its worst numbers for seven months.

The Change Commission, composed of officials of the Ministry of Finance and the Government Board of the Bank of Mexico, announced after the closing of the Exchange an increase of USD 10,000 million in its exchange hedging program Liquidable in national currency, after the sharp fall in the peso.

The commission, made up of officials from the Ministry of Finance and the Governing Board of the Bank of Mexico, said in a statement that decided to raise the program size to 30,000 million dollars, “With the aim of strengthening the mechanisms available, as well as maintaining an orderly operation of the exchange market.”

Too They indicated that it will be possible to convene at any time and immediately carry out auctions of these instruments and, if necessary, take additional actions, in addition to ratifying its commitment to continue evaluating the operating conditions in the exchange market.