Capital & Financial Account Concerns Growing

BMI View: Mexico's balance of payments data in Q109 show a continued deterioration in the country's capital and financial account, which posted a deficit for the first time in two and a half years. This supports our view that the country could face a serious balance of payments problem in the medium term, as the capital and financial account fails to cover the current account shortfall, which in turn would likely see the currency weaken in line with our expectations for a 12% depreciation for the peso against the dollar by year-end, to MXN14.70/US$.

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