1996-10-24 Local Press - ECONOMY
Article Index
ECONOMY
Volatile Week in Currency Markets
The peso confronted several days of speculation and volatility last week, resulting in an overall 2 week devaluation of about 3.7%. At some banks on the northern border, the exchange rate reached S pesos per dollar on Wednesday, October 16. In response, the Bank of Mexico (Central Bank) adjusted interest rates-- leading to an increase of over 5 percentage points in two days, the largest increase in 1996. (La Jornada, 16-17 October).
Zedillo administration spokespeople - and Zedillo himself - said that these speculative bouts are natural, and temporary and therefore not in; to worry about. (El Financiero, IS October).
The High Cost of Money: Obstacle to Recovery
Although active interest rates at commercial banks have fallen to about 45% (from around 65% at the close of 1995), the restriction of credit has continued to block the recovery of the productive plant's competitiveness. The cost of money in Mexico is up to four times higher than that in the United States. (El Financiero, 15 October).
Unemployment Still a Big Problem
Although the open unemployment rate has declined since 1995, unemployment is still 60% higher than it was before the crisis erupted in December 1994. According to the National Institute of Statistics, Geography and Information (INEGI), during the first nine months of 1996, an average of 2.1 million people were openly unemployed at any given time. (El Financiero, 18 October).