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Fitch Lowers Outlook on Mexican Debt
Fitch Lowers Outlook on Mexican Debt

Fitch Lowers Outlook on Mexican Debt

Fitch Lowers Outlook on Mexican Debt

A major international financial rating agency lowered the outlook for Mexico’s debt amid uncertainty over the country’s future economic relationship with the US under president-elect Donald Trump, Yahoo reported. Fitch Ratings moved the country from “Stable” to “Negative” outlook for its long-term foreign and local currency issuer default ratings, but kept the overall BBB+ rating, which denotes moderate investment risk in a country. Fitch defines a “negative” outlook as meaning that a debt rating is “likely to move” over a one- to two-year period. A “negative” outlook is typically interpreted as a warning that there could be a debt downgrade coming in the coming year. “The victory of Donald Trump in the US presidential election has increased economic uncertainty and asset price volatility in Mexico as the president-elect has alluded to renegotiating or terminating the North American Free Trade Agreement with Mexico and tightening immigration controls,” the agency said in its release. Mexico’s manufacturing base is highly integrated with the American economy, and most analysts predict serious economic backlash if Trump rips up NAFTA.

 

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