| Description |
1 online resource (37 pages) : color illustrations |
| Series |
IMF country report ; no. 16/360 |
|
IMF country report ; no. 16/360.
|
| Contents |
The transmission of monetary policy rates to lending and deposit rates -- Global conditions and capital flows to emerging markets: how sensitive is Mexico? -- Welfare gains from hedging oil-price risk -- Evaluating the stance o monetary policy |
| Summary |
The transmission of monetary policy rates to lending and deposit rates: Monetary policy rate changes are passed through rapidly to bank rates. Pass-through is complete for commercial lending rates, but weaker for deposit rates and especially low for sight deposits. Passthrough to mortgage rates is statistically insignificant. -- |
|
Global conditions and capital flows to emerging markets: how sensitive is Mexico?: The open capital account and large foreign holdings of Mexican assets naturally expose Mexico to changes in global conditions, such as an abrupt shift in investor sentiment toward emerging markets. Using a panel of gross capital flows to 30 emerging markets, this paper evaluates the sensitivity of Mexico's foreign funding to global shocks between 2001 and 2015 and compares it to other emerging markets (EMs), in particular in Latin America. We find that global factors, such as changes in risk aversion or commodity prices, affect Mexico's capital account mostly through their effect on the bond market. Between 2010 and 2015, half of the variance in Mexico's bond inflows was explained by changes in global conditions. When compared to other EMs, Mexico's bond market is among the most sensitive |
|
Welfare gains from hedging oil-price risk: Since at least 2001, Mexico's federal government has hedged the near-term fiscal impact of declines in oil prices through put options. Using a structural model calibrated to the Mexican economy, we quantify the overall benefits of this long-standing policy. Compared to a selfinsurance alternative, we find welfare gains from hedging through put options equivalent to a permanent increase in consumption of 0.4 percent. These gains arise mostly from a reduction in sovereign spreads and to a lesser extent from smoothing income volatility. In terms of design, expanding the program to cover domestic fuel sales could yield further gains once gasoline and diesel markets are liberalized. Relying more on liquid instruments--such as options on the Brent--is an avenue worth exploring to ensure the program remains cost effective |
|
Evaluating the stance o monetary policy: Using an estimated Taylor rule and a small DSGE model, this study finds that the monetary policy stance in Mexico has shifted from accommodative to broadly neutral |
| Notes |
"November 2016." |
|
"November 4, 2016; prepared by Alexander Klemm, Chang Ma, Damien Puy, and Fabian Valencia"--Page 2 of pdf |
| Bibliography |
Includes bibliographical references |
| Notes |
Description based on online resource; title from pdf title page (IMF website, viewed December 13, 2016) |
| Subject |
Monetary policy -- Mexico
|
|
Exchange rate pass-through -- Mexico
|
|
Capital movements -- Mexico
|
|
Investments, Foreign -- Mexico
|
|
Petroleum products -- Prices -- Mexico
|
|
Public welfare -- Mexico
|
|
Economic development -- Mexico
|
|
Fiscal policy -- Mexico
|
|
Capital movements
|
|
Economic development
|
|
Exchange rate pass-through
|
|
Fiscal policy
|
|
Investments, Foreign
|
|
Monetary policy
|
|
Petroleum products -- Prices
|
|
Public welfare
|
|
Mexico
|
| Form |
Electronic book
|
| Author |
Ma, Chang, author.
|
|
Puy, Damien, author, (IMF staff)
|
|
Valencia, Fabian, author, (IMF staff)
|
|
International Monetary Fund. publisher.
|
| ISBN |
9781475556032 |
|
1475556039 |
|
