This search for yield occurs in the context of a Mexican peso that is freely convertible and now traded 24 hours with ample liquidity. An additional favorable factor seems be the inclusion in 2010 of Mexican government bonds into the Citigroup World Government Bond Index (WGBI), which is used as a benchmark by many index fund managers and institutional investors.
As of now, there are no apparent signs of overheating in spending or the gestation of a credit or asset boom as a result of these flows, either of which could endanger control over inflation or the stability of the financial system. However, a possible reversal of these flows may translate into volatility and asset price declines, including exchange rate depreciation.