By Paul Shortell
Mexico’s electricity industry appears poised to outperform oil and gas in 2015. Ambitious plans to boost investment and increase production in the hydrocarbons sector, widely consider the poster child for President Enrique Peña Nieto’s wide-ranging economic reforms, have been complicated by the collapse of crude oil prices. State oil company Pemex recently reduced its estimate of investment this year by the oil and gas sector from $35bn to $25bn and may be forced to delay licensing of certain unconventional and offshore blocks. In January, more than 10,000 workers contracted by Pemex lost their jobs as the indebted company undertook new austerity measures.
Though not without its own challenges, the power sector shines by comparison. Read more
What’s the one good thing about Mexico’s consumer confidence being poor? It should help prevent the country’s weakening peso from fuelling inflation.
All eyes are on the peso at the moment, after monetary authorities launched a new intervention programme on Wednesday to try to calm volatility and ensure liquidity as the dollar goes from strength to strength. Read more
The International Monetary Fund will hold discussions in May and make a decision in November on whether to add the Chinese renminbi to the four currencies it uses to value its Special Drawing Right (SDR), the international reserve asset created by the Fund.
China is keen for this to happen, as the deputy governor of its central bank, the People’s Bank of China (PBoC), reiterated at a press conference in Beijing on Thursday. There is a snag: the renminbi is not and may never be a convertible currency, which is a standard pre-requisite of a reserve currency. But as David Lubin of Citi Research argues in a note also published on Thursday, that consideration is likely to be put aside. Read more
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