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News Article

Positive Cases Increase 8.3 Percent in One Day

By Ricardo Guzman | Tue, 04/21/2020 - 22:18

An 8.3 percent increase in positive cases compared to yesterday’s figure was reported today in the Ministry of Heath’s daily briefing. The 729 new cases increase the total number to 9,501, while 145 deaths also occurred in the last 24 hours.

Deputy Minister of Health López-Gatell said Chancellor Marcelo Ebrard has been designated the national coordinator of all government actions to face the COVID-19 pandemic, and that he has played a crucial role for hospital conversion in the country. “Claudia Sheinbaum has been proposed to fulfill this coordinating role in the metropolitan area of ​Mexico City because of the good relationship she has with the State of Mexico Gov. Alfredo del Mazo,” López-Gatell said.

 

As of Tuesday, April 21

729         new cases (from yesterday)

9,501     confirmed cases nationwide

8,262     under investigation

857         deaths

 

Impact on markets (19.30 hrs)

US Dollar              MX$24.32            (0.74%)

BMV IPC               33,892.28             (-1.70%)

Dow Jones          23,018.88             (-2.67%)

 

MX$750 billion Banxico plan

Aiming to restore order in the financial markets , strengthen credit granting channels and provide liquidity for the healthy development of the financial system, Banxico announced 10 additional measures worth MX$750 billion, the financial organization has reported. The Central Bank explained that the figure to support the financial system, added to what has already been implemented, is equivalent to 3.3 percent of Mexico's GDP.  “The COVID-19 pandemic and its potential negative implications for global economic activity, coupled with the abrupt drop in oil prices, have had a negative impact on the behavior of our country's financial markets,” Banxico warned. The bank said it seeks to facilitate financial intermediaries to fulfill their function of providing financing to the economy, so it can be used by SMEs and households that have seen a reduction in their income.

 

Interest rates at 6 percent

Banxico lowered its interest rate by 50 basis points to 6 percent. “Considering the risks derived from the COVID-19 pandemic for inflation, economic activity and financial markets, there are significant challenges for monetary policy and the economy in general,” the bank said in a statement. The governing board unanimously voted for the rate reduction, the seventh straight cut, and estimated that in the first half of this year the country's GDP could shrink more than 5 percent compared to the same period of the previous year.

 

ECLAC projects 6.5 percent contraction

Mexico's GDP will fall 6.5 percent in 2020 as a consequence of the COVID-19 pandemic, the Economic Commission for Latin America and the Caribbean (ECLAC) has reported. According to the office, the last time the region had seen a similar contraction was on the Great Depression of 1930. Venezuela’s 18 percent plunge will be the biggest, followed by Argentina, Mexico and Ecuador with 6.5 percent contractions each. G-20 leaders need to support multilateral organizations to lend at favorable interest rates to heavily indebted countries, said ECLAC’s Executive Secretary Alicia Bárcena. Mexico's exports will register a year-on-year drop of 11.6 percent in 2020, ECLAC also reported. In its previous March forecast the UN office estimated a 7.4 percent drop.

 

Citibanamex adjust to 9 percent contraction

Mexico’s GDP will contract 9 percent, not the 5.1 percent drop forecasted in the last report, said Citibanamex’s latest growth estimate. “A sharp contraction in GDP will lead to less pressure on consumer prices, even in the face of a weaker peso,” the bank stated and warned of political and social consequences. “We believe AMLO's aversion to what he sees as ‘neoliberal policies’ will continue to limit the size of any economic package,” the bank said, thus “extraordinary policy reactions” are needed. A fiscal support package of 1.5 percent of GDP will be required or the GDP drop can reach 10.5 percent.

 

Oil prices recover

The Mexican crude basket returned to positive territory closing at US$7.12 per barrel, an increase of 400 percent compared to the historic -US$2.37 reported yesterday, PEMEX has reported. After a major shock on Monday’s global oil trading the US reference WTI closed at US$11.57 per barrel for June contracts, after yesterday’s -US$37 for May. After resisting Monday’s global shock, Brent plunged 25.43 percent to end today’s session at US$19.33 per barrel.

 

Trump tightens border control

US President Donald Trump said he plans to "temporarily suspend immigration into the US," in an attempt to protect US workers from the COVID-19 pandemic economic toll. President Trump first announced his proposal in a tweet late Monday and today added details at the White House briefing. He said he plans to suspend immigration for people seeking green cards for 60 days, and an extension would be evaluated after 60 days based on economic conditions. “We must first take care of the American worker,” Trump said.

Ricardo Guzman Ricardo Guzman Editor