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MEXICO CITY, March 23 Mexico's economy may face
further volatility, but the outlook for the country is less
gloomy, Finance Minister Jose Antonio Meade said on Thursday.
"We are not exempt from seeing and living a period of great
volatility, but the scenarios are becoming more contained,"
Meade told local radio.
The Mexican peso slumped to a record low in January on
concerns that U.S. President Donald Trump could rip up a free
trade deal with Mexico, but it has recovered as the country's
northern neighbor has taken a more conciliatory tone.
The recovery in the peso from its January low will help
inflation cool back toward policymakers' 3 percent target,
central bank chief Agustin Carstens said on Wednesday.
Data on Thursday showed Mexico's annual inflation rose to
5.29 percent in early March, its fastest pace in nearly eight
years, and Carstens said in a radio interview on Thursday that
policymakers had some room to continue raising interest rates.
The central bank raised its benchmark interest rate to a
nearly eight-year high of 6.25 percent in February. Policymakers
have said they do not expect a big effect on economic growth
from higher rates.
However, Moody's Investors Service said in a report on
Thursday that tighter borrowing costs in Mexico would weigh on
the country's "lackluster" economic performance and could be a
problem for companies that rely on short-term financing.
(Reporting by Adriana Barrera; Editing by Lisa Von Ahn)