Mexico Strengthens Relationship with Dubai: The Week in Finance

This week, Dubai opened its newest international chamber in Mexico, as the United Arab Emirates (UAE) continues to enhance its commercial ties with the Latin American country, which is its second largest trading partner in Latin America. The Bank of Mexico (Banxico) is considering increasing its interest rate to fight the skyrocketing inflation.

Meanwhile, experts at the World Bank raised the alarm about the growing number of people suffering from poverty.

Ready? This is the week in Finance!

Dubai Opens International Chamber in Mexico

The UAE and Mexico are seeking to strengthen commercial ties with the opening of the fourth Dubai International Chamber in Latin America, as both countries are trying to explore new avenues of bilateral economic cooperation.

“Our presence in Mexico falls in line with Dubai International Chamber’s strategy and ongoing efforts to boost Dubai’s foreign trade and support companies in the Emirates with their global expansion,” said Hamad Buamim, President and General Director, Dubai International Chamber.

Poverty has a New Meaning

Experts are showing major concerns regarding the growth of poverty and the number of people who will suffer from it following the global pandemic and the invasion of Ukraine.

“Reversing the damage caused by the pandemic and the war in Ukraine will require action to prevent fragmentation in business networks and investment in education and digital technologies. Also, promoting labor force participation through active labor market policies,” said the World Bank Global Economic Prospects.

BBVA Survey Reports Results

BBVA Mexico’s 2022 National Regional Directors’ Meeting took place this month. During the event, BBVA announced the results of a survey of 375 directors regarding the perception of Mexico’s economic outlook for the next 12 months. Of those managers, 75 percent stated that the country’s economic outlook will remain the same or worsen in the next 12 months. The survey also detected that the greatest obstacle for Mexico’s business community is its feeble rule of law.

Banxico Considers Increasing its Interest Rate

Banxico is considering the increase of its interest rate, despite raising it by 50 basis points in Sep. 2021. “Banxico is trying to quickly put the monetary policy rate above neutral to reduce inflation, especially core inflation, and to prevent the peso from depreciating too much against the dollar to avoid external pressure on prices,” the institution said. 

Banxico’s Governing Board also announced that it will analyze the US Fed’s decision to increase interest rates for the following monetary policy announcement. “The increase of 75 base points, as was repeatedly mentioned during the decision that led to the previous monetary policy announcement. It is on the table… the decision may come in a few days,” Gerardo Esquivel, Deputy Governor, Banxico.