Bank of Mexico to Release 1998 Monetary Policy
MEXICO CITY -- Few observers expect the presence of a new governor at the Bank of Mexico to bring about a change in the central bank's monetary policy, to be released Monday.</br></br>The policy outline will be the first for Governor Guillermo Ortiz, the former finance minister who took up the post Jan. 1 following the retirement of Miguel Mancera.</br></br>As in 1997, the monetary policy in 1998 is expected to leave the peso floating freely against the U.S. dollar while keeping a lid on money supply to hold inflation to the government's budgeted goal of 12% for the year. "We are leaning toward a tight policy to avoid a balance-of-payments imbalance," Javier Murcia, director of economics for Latin America at Credit Suisse First Boston said of his expectations.</br></br>Mexican economic consultant Jonathan Heath also believes policy will vary little from 1997, with one difference. "Hopefully, there will be a mention of a contingency program, on the assumption that the current-account deficit erodes more than expected," he said.</br></br>The government has projected a current-account deficit of from $6 billion to $7 billion for 1997, based on an increase in imports as consumer demand recovers. The deficit stood at $4 billion at the end of the third quarter.