Why is the resilience of the financial system so important? The financial system is the lifeblood of the real economy. It touches all facets of our economy from households to corporations and even governments.
The second hike came in conjunction with the government’s announcement of expenditure cuts, and sought to prevent contamination of inflation expectations from currency depreciation, as well as to contribute to stronger macroeconomic fundamentals. Trust gained over years of consistent endeavor, however, can be lost in an instant. Mexico has an unprecedented opportunity to consolidate convergence to the inflation target, given unusually subdued price pressures.