MEXICO CURRENT ACCOUNT DEFICIT DEEPEST IN 20 YEARS
Mexico current account deficit swelled last year to its largest in at least 20 years, as a collapse in oil prices widened its shortfall in foreign trade, central bank figures show.
CARSTENS CALLS FOR EM MONETARY POLICY ACTION
MEXICO CITY — CNBC – Central banks in emerging markets could follow counterparts in the developed world and become “market makers of last resort”, using unconventional monetary policies to try to stimulate their flatlining economies, according to Mexico’s central bank chief.January 19, 2016 Ford Motor Co (F.N) will announce a new automobile plant in the central Mexican state of San Luis Potosi during the first quarter, three Mexican officials familiar with company plans said on Thursday.
www.cnbc.com/2016/01/17/mexico-bank-chief-calls-for-em-monetary-policy-action.html
Banxico Auctions
Mexico Central Bank (Banxico) issues new procedures for daily auctions
The Exchange Commission today announced adjustments to its daily dollars auction. The main reason is that in recent weeks there is a more stable financial market performance.
The main adjustments are:
· To be suspended after November 23, 2015 the daily auctions for US 200 million dollars without a minimum price.
· The effective period for daily auctions with minimum price ranges will continue until 29 January 2016. The mechanism will remain the same as before. 200 million dollars will be auctioned daily if the exchange rate exceeds 1 % yesterdays price FIX.
· In addition, if the $ 200 million auctioned are exhausted, the Bank of Mexico will offer another 200 million, but now at a minimum price of FIX 1.5% above the previous day.
The maximum daily amount to be auctioned will remain 400 million from 23 November 2015 until January 29, next year.
The elimination of the daily auctions with no minimum price caused the peso back to trade above the $ 16.60 per dollar, after it had reached a minimum in the day of $ 16.55.
Dollar to historic lows in Mexico
Global instability raises the dollar to historic lows in Mexico
The Mexico peso this morning has depreciated to a record low driven by the fear of slowing Chinese economy and the possible rise of interest rates by the Federal Reserve of the United States. The fall of today for the Mexican currency adds to a very difficult year. This is the 16th occasion in reaching a historic low in 2015 so far.
The strength of the dollar and the Chinese instability has caused the Mexican Peso to have a major devaluation in at least the past 15 years. The US Dollar is trading at 17 pesos. The Mexican currency has lost a quarter of its value it had when President Enrique Pena Nieto took office in December 2012.
The Mexican peso await more storms. On September 4th the US is expected to release employment levels, so it is expected that the Federal Reserve to set new interest rates (which have remained between 0% and 0, 25% for seven years) on September 17. The situation could increase pressure on the Mexican currency. By then, the peso could reach up to 17.50 for each dollar, according to the economic analysis of Banco Base, Gabriella Siller.
A Chinese slowdown and the stronger dollar, added to other factors such as deepening of the Greek crisis and the fall in oil prices . The Mexico Peso has not been the only Latin American currency that has been affected by the global instability, the Chilean peso has lost at least 12% of its value so far this year and the Brazilian real by 23%.
The president of the Bank of Mexico, Agustin Carstens , said Wednesday that they will do “everything possible” so the economic instability do not increase inflation in Mexico, which is at record lows. Carstens said he is willing to raise interest rates in the Mexican central bank to keep inflation pressures, driven by the collapse of the peso. If the Fed, as expected, increased interest rates, it is expected that the Bank of Mexico do the same.
BMW SLP
MEXICO CITY — BMW plans to spend $1 billion to build a plant in San Luis Potosi, Mexico, with capacity of about 150,000 units per year, the company said today.
Start of production is planned for 2019, with a work force of about 1,500 employees, said Harald Krueger, BMW board member for production, in a statement. BMW did not disclose what models it will build at the plant.
Krueger said the new plant, combined with BMW’s plant in Spartanburg, S.C., underscores BMW’s commitment to the North American Free Trade Agreement region — Mexico, Canada and the United States.
“The Americas are among the most important growth markets for the BMW Group,” he said. “We are continuing our strategy of ‘production follows the market.’”
BMW’s announcement comes on the heels of last week’s announcement that, in a joint venture, Renault-Nissan and Daimler will build a $1.36 billion plant in Aguascalientes, Mexico, to build compact vehicles for their Infiniti and Mercedes-Benz brands.
BMW made its announcement here at the residence of Mexico president, Enrique Peña Nieto. He attended the ceremony along with Secretary of Economy Ildefonso Guajardo Villarreal and the governor of San Luis Potosi state, Fernando Toranzo Fernández.
BMW said Mexico’s “large number of international free trade agreements — within the NAFTA area, with the European Union and the MERCOSUR [South American trade bloc] member states, for example — was a decisive factor in the choice of location.”
The automaker also cited the quality of the work force, a supplier network that BMW already sources parts from, and infrastructure. Krueger said BMW has “already reached initial agreement with worker representatives in San Luis Potosi.”
BMW already has more than 100 suppliers in Mexico, Krueger said, and that number has doubled over the last four years. There will be more supplier opportunities in the future, he said.
Andreas Klugescheid, corporate and government affairs head of communications for BMW’s production network, told Automotive News that supply sourcing in Mexico in 2013 totaled $1.61 billion dollars.
Goodyear Tire
MEXICO CITY, April 24, 2015 /PRNewswire/ — The Goodyear Tire & Rubber Company (NASDAQ: GT) today announced it will build a new tire factory in San Luis Potosi, Mexico to serve its customers in the Americas. Goodyear Chairman and Chief Executive Officer Richard J. Kramer made the announcement here today at a ceremony with Mexican President Enrique Pena Nieto.
The new factory, combined with investments in its existing U.S. and Canadian factories, will enable Goodyear to meet the strong and growing market demand for high-value-added (HVA) consumer tires in North America and Latin America. Industry demand for HVA tires in these regions is expected to increase by 10 million tires per year from 2014-19.
“This is an important investment in Goodyear’s future,” said Kramer. “Our new factory will provide us with a world-class manufacturing asset and will be a strong complement to our existing plants in North America and Latin America. The new plant advances our strategy to serve the needs of our customers and is consistent with our focus on investing in high return projects that drive profitable growth.”
The new factory, to begin production in mid-2017, will be Goodyear’s most technologically advanced and have a capacity of about six million tires per year. When it reaches full production, the factory will employ about 1,000 people.
Goodyear’s selection of San Luis Potosi follows an extensive review of potential locations throughout the Americas. The review took into consideration factors including cost structure, logistics, infrastructure, skilled workforce, tariffs and quality-of-life issues.
“San Luis Potosi is an ideal location for the new factory. Its central geographic location will enable us to support our valued customers and consumers throughout North America, Mexico and Latin America,” said Kramer.
The new factory will reflect Goodyear’s commitment to the environment. It will be a zero-waste-to-landfill and zero-solvent facility, and it will use natural gas, energy efficient LED lighting and state-of-the-art dust collection equipment.
Total capital investment for the project will be approximately $500 million to $550 million, net of government incentives, and is consistent with the company’s existing capital allocation plan. Its outlook for 2015 and 2016 capital expenditures remains unchanged at
$1.1 billion and $1.2 billion to $1.3 billion, respectively.