Despite NAFTA and AMLO, Mexico maintains stable outlookBy Elliot Bullman
Markets are optimistic but cautious regarding investments in the country.
In a conference call in New York the rating agency Standard & Poor's (S & P) said it will maintain a "stable" BBB+ rating on Mexico's debt, regardless of whether an agreement is reached in the Free Trade Agreement or if Andrés Manuel López Obrador wins the 2018 elections.
In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of a country, thus having a big impact on the country's borrowing costs.
Standard and Poor’s BBB+ rating implies that the investment protection factors are below average, but stable for a prudent investment. This will give assurance to markets and foreign investors to continue their operations in the country.
S & P’s sovereign ratings manager Joydeep Mukherji said that Mexico‘s outlook remains stable despite the threats about the potential changes of NAFTA and other factors that could affect trade or foreign investment.
The managing director of S & P said that "the fundamental pillars that maintain Mexico's rating will hold firm regardless of who wins the elections" in reference to the possible success of AMLO.
In addition they believe "the Bank of Mexico would remain autonomous and continue the flexible exchange rate and its credible monetary policy."
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