Banco de México: Drop in commodity prices, in particular oil, has reduced emerging economies' room for maneuver

Banco de México's governor says maintaining sustainable public finances is important and is respectful of federal government's management of fiscal policy

Key comments

• Says drop in commodity prices, in particular oil, has reduced emerging economies' room for maneuver when deciding debt and fiscal policy.
• Says bank will hold its usual monetary policy meeting on may 14 despite out-of-cycle rate cut this week, will continue to evaluate and take actions it deems necessary.
• Says access to financing is an important alternative for individuals, households and firms who have seen their income reduced.
• Says highly unlikely that big personal spending decisions will be made now despite lower cost of financing after rate cuts.
• Says challenge is getting through short-term crisis, and as economy gradually returns to normal it will be important to give liquidity, financing to those who need it.
• Says we’re seeing a significant drop in headline inflation, in particular as gasoline prices drop.
• Says in short term lower energy prices and in medium term greater economic slack could exert downward pressure on inflation.
• Says in short term supply issues with certain goods and in medium term foreign exchange pressures could exert upward pressure on inflation.
• Says in short term the impact of energy prices is clearly the dominant force on headline inflation.