Mexico’s Financial Stability Seen at Risk as BNP Says Intervene
- Analysts weigh risk of dollar sales and emergency rate hike
- Bonds fell and the decline of the peso accelerated this month
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Mexico’s financial stability is hanging in the balance as the peso’s tumble prompts a dangerous acceleration in outflows from the nation’s bonds, according to BNP Paribas SA.
A pullback by foreigners is particularly worrisome for authorities, who have often cited peso bond holdings by international investors as a sign of stability. Central bank policy makers will now have to act soon, BNP analysts said in a note on Friday. Separately, Citigroup Inc. and Barclays Plc said the peso’s plunge could prompt another surprise rate increase after policy makers unexpectedly raised the benchmark in February outside of a regularly scheduled meeting.