Mexico's Finance Minister To Meet With Ratings Agencies

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Mexico Finance Minister Agustin Carstens plans to meet in the U.S. with investors and debt ratings agencies to assure them of the government's commitment to sound public finances, the Finance Ministry said Friday.

The ministry said Carstens will meet with Fitch Ratings and Standard & Poor's, both of which have changed Mexico's sovereign ratings outlook to negative from stable.

Investor jitters about a possible downgrade have put some pressure on local government bonds, with 10-year yields moving back above 8% in the latter half of May, and the peso weakening to around MXN13.40 to the dollar from around MXN13. Standard & Poor's, Fitch and Moody's Investors Service all have Mexico several notches into investment grade.

Earlier this week, Carstens reiterated that the government will have to seek measures in the coming months to increase next year's revenue, cut spending, or face greater temporary budget deficits.

"Every time Mexico or any other country has drifted from the path of healthy public finances, the price they've had to pay has been high," he said at an event.

He said Mexico isn't expecting any balance-of-payments problems this year or next. A weaker peso will boost Mexico's exports, while an economic recovery abroad toward the end of the year will bring greater investment, remittances and tourism revenue, he said.

The Finance Ministry said Friday that Carstens also plans to meet with Federal Reserve Bank of New York President William C. Dudley, U.S. Homeland Security Secretary Janet Napolitano, Inter-American Development Bank President Luis Alberto Moreno, and John Lipsky, first deputy managing director of the International Monetary Fund.

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