World Bulletin / News Desk
Mexico's central bank chief had warned in September that a Donald Trump victory in the US presidential election would hit his country like a powerful storm.
And after Hurricane Trump made landfall, the peso fell to an all-time low Wednesday and the Mexican stock market plunged at the opening bell on fears Trump would make good on his promises to upend economic ties.
But, clearly striving to project a sense of stability, the government said Wednesday that it would not take any immediate economic actions, and the nation's president extended a hand to the Republican billionaire.
The stakes are high for Mexico. Trump has vowed to deport millions of undocumented immigrants, to force the Mexican government to pay for a giant border wall and to renegotiate the North American Free Trade Agreement (NAFTA).
President Enrique Pena Nieto turned to Twitter to convey to the US president-elect his "willingness to work together in favor of bilateral relations."
"Mexico and the US are friends, partners and allies who must continue collaborating for the competitiveness and development of North America," he said.
Pena Nieto shocked and angered many in his country when he met Trump at his official residence in Mexico City on August 31.
While the president later conceded that the invitation had been too hasty, he defended it as the right decision to open dialogue with a potential future US president.
Foreign Minister Claudia Ruiz Massieu told the Televisa network the government had a "fluid dialogue" with the Trump campaign in the runup to the election.
But, she stressed, "paying for a wall is not part of our vision."
- 'A nightmare' -
Mexicans were less diplomatic during the campaign season, venting their anger by crushing Trump pinatas, burning his effigy and organizing an exhibit of cartoons mocking him as a Nazi or excrement.
"I feel very sad. It's a nightmare, with a lot of uncertainty about what's going to happen," said Erick Sauri, a 35-year-old architect who watched the election in dismay at an American barbecue restaurant in Mexico City.
"For now we're already making less than we (were) making yesterday," Sauri said, referring to the national currency's fall to a record low.
The Mexican currency weakened to 20.3 pesos to the dollar, a 7.64 drop, according to private bank Citibanamex, while stocks opened 3.18 percent lower.
But Finance Minister Jose Antonio Meade said there was no need for what he called "premature actions," as trade is not yet being impacted by the election.
"Mexico has lived through challenges of volatility in the past that we faced with unity, seizing on our economic strength and taking correct and prudent policy decisions, and this won't be an exception," Meade said.
Mexico, he added, has inflation under control, controls deep international reserves totaling $175.1 billion and enjoys macroeconomic stability.
Central bank chief Agustin Carstens, who in September had compared Trump to a maximum Category Five hurricane, said last week that the authorities had prepared a contingency plan, but he also announced no new measures and said bank governors would meet next week.
The 'most to lose'
The likelihood of Trump pursuing his Mexico policies is unclear, according to Fitch Rating.
"But the advent of a Trump administration increases economic uncertainty in Mexicogiven its very close economic ties to the US," the ratings agency said in a note.
Jonathan Heath, a prominent Mexico City-based economist, said the peso would continue to fall in the near term.
"We are in shock and in a way the markets are reflecting that," Heath told AFP.
But he said the main threat is the structural changes that could befall Mexico if Trump scraps NAFTA (he does have the power to do so, though such a move would be without modern precedent).
Two-way trade in goods totaled $531 billion in 2015, and 80 percent of Mexico's exports goes to the United States.
"Mexico is the country that stands most to lose at a global level," Heath said.
The money Mexican immigrants send home from the United States provides another important economic lifeline: such remittances totaled $17.7 billion in the first eight months of the year.
"In the very short term we could see an increase in remittances," Heath said, "as many families take advantage of the exchange rate in the face of the uncertainty that they may no longer be able to do so."
Last Mod: 10 Kasım 2016, 00:18