Central Banks
Krugman Says Banxico Not Matching Fed Could Have Drastic Impact
- Mexico pacing Fed ‘makes sense’ for now, Nobel laureate says
- Deputy Banxico governor said this week decoupling an option
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Nobel Prize-winning economist Paul Krugman on Thursday said Mexico could see “drastic effects” if its central bank didn’t keep matching the US Federal Reserve’s key interest rate hikes.
Mexico’s central bank, known as Banxico, has matched the Fed’s last five hikes, but began raising rates nine months before the US did. Deputy Governor Galia Borja left open the possibility of delivering a smaller increase than the Fed if variables improve, speaking at Bloomberg’s Mexico Capital Markets Forum earlier this week.