February 21, 2019 / 4:32 PM / 6 months ago

UPDATE 1-Mexican central bank flags Pemex risks to economy -minutes

(Adds additional details from minutes, president's comments)

MEXICO CITY, Feb 21 (Reuters) - A majority of members of Mexico's central bank board has warned that a fresh credit rating downgrade for state oil company Pemex could hit government finances, minutes from its latest monetary policy meeting showed on Thursday.

In minutes from the Bank Of Mexico's Feb. 7 monetary policy meeting, the majority of board members cited Pemex's financial health as one of several risks that could affect macro-economic conditions over the medium and long term.

"(The majority) mentioned among these risks the financial fragility and future of Pemex and, in particular, the risk of a further deterioration in its credit rating, which could impact the federal government's financing costs and, in general, the conditions of access to external financing," the minutes said.

Rating agency Fitch downgraded Pemex's credit rating in late January, putting it one notch above junk.

Last week, the government responded by announcing it would inject $3.9 billion into Pemex, which must make over $27 billion in debt payments over the next three years.

Separately, President Andres Manuel Lopez Obrador said on Thursday Mexico will not offer more joint ventures between private companies and Pemex until existing projects generate oil production, raising doubts about upcoming auctions.

Also in the minutes, a majority of the bank's board members said the balance of risks to inflation was tilted upward, noting that potential exchange rate pressure is one of the main factors of uncertainty surrounding inflation in the near future.

The bank's board voted unanimously to hold its benchmark rate at 8.25 percent during its meeting earlier this month. (Reporting by Frank Jack Daniel and Dave Graham; writing by Julia Love Editing by Tom Brown)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below