State Finance Secretary José de Jesús Granillo Vázquez said they are concerned that the cut will cause an inflationary effect; in contrast, financial analyst León Salas said that the conditions existed to make this reduction, because the current indicators are better than expected.
Treasury fears higher inflation due to rate cuts; IP is confident that it will stimulate the economy
In this regard, Armando Gutiérrez, president of the National Chamber of the Transformation Industry (Canacintra), stated that this banking movement is important to stimulate the economy and that the issue of inflation, as well as the increase in the price of the dollar in recent days, are due to other factors that do not have a direct relationship with the interest rate.
TIMES ARE A CONCERN
The Secretary of the Treasury, Jesús Granillo, explained that a reduction in the interest rate is positive, because it is a factor that encourages the dynamism of the economy, but what is strange is the moment in which the Bank of Mexico (Banxico) decides to do so.
The official said that this week there was a considerable fall in the stock markets of several countries, as well as an increase in the price of the dollar, which adds to the latest inflation data in the country that in July accelerated to 5.57 percent, while in the state it rose from 4.36 to 4.81 percent and in the city, from 4.14 to 4.46 percent.
“The drop in interest rates was not expected, because the Bank of Mexico had been acting in a similar way to what is happening in the United States. So, what is worrying is that there will be inflation,” he said.
As regards long-term loans taken out by the State, he pointed out that the benefit of the lower interest rate is not significant, since in these cases, hedges were taken out to ensure that a rise in the rate would not impact what is paid, but it also applies if there is a drop; that is, there are no changes in the conditions despite the fluctuations.
INFLATION IS UNDER CONTROL
Financial analyst León Salas considered that the end of the six-year term has been uneventful in regards to the exchange rate; however, what happened in recent days with the rise in the dollar and the fall of the markets is not something that the Bank of Mexico can influence, “in addition
that underlying inflation has behaved in a controlled manner,” the analyst stressed.
In turn, Armando Gutiérrez, head of Canacintra, said that the industrial sector sees this drop in interest rates as a phase that will pass without major difficulties and that what is more worrying is the projections of a recession in the United States, which has been predicted for more than a year.
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