DBRS: Mexico trend positive

DBRS said it confirmed Mexico's long-term foreign-currency debt at BBB, long-term local-currency debt at BBB (high) and short-term foreign rating at R-2 (high) and changed the trend on these ratings to positive from stable. The R-1 (low) local currency rating was confirmed with a stable trend.

The agency said the trend revision reflects its view of Mexico's improved economic performance, proven track record of decisive and predictable macroeconomic management and the improved prospects for longstanding structural reforms, particularly in the fiscal and energy sector, to raise growth potential.

The BBB rating is underpinned by the country's well-managed public finances with moderate debt ratios, well-engineered monetary easing with moderate and stable inflation and a strong commitment to a flexible exchange rate regime, DBRS said.

The ratings are constrained by a relatively low GDP growth record vis-‡-vis other emerging market peers, limited fiscal flexibility due to reliance on oil revenues, a relatively narrow non-oil tax base, lack of significant resources in the oil stabilization funds as well as structural weaknesses in some sectors of the economy that continue to dampen economic activity, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.