Recent moves on international currency markets have been mostly orderly and there is little risk of upset for major currencies like the euro, yen and dollar, Mexican Finance Minister Luis Videgaray said on Wednesday.
Videgaray said Mexico's peso, closely linked to the dollar due to the two countries' close trade ties, also had shown little signs of stress.
"The Mexican peso has fluctuated up and down in the past few days, but it has done so in an orderly manner with plenty of liquidity, which is what we really look at. So in that sense, we're not concerned about the functioning of the exchange rate markets," he said in an interview on the sidelines of the International Monetary Fund and World Bank fall meetings.
Videgaray said the recent strengthening in the dollar was to be expected, given the performance of the US economy compared to other developed countries, and that was why the rise had not rung alarm bells among Group of 20 nations.
"It's a topic of relevance and it's understood that the US economy is performing better than other major economies, and you should expect it to continue performing better. The appreciation of the US dollar is to be expected." Asked if the recent currency moves had been orderly, he said: "For the most part, yes, markets are quite liquid."
Videgaray said an expected reduction in stimulus by the US Federal Reserve was "good news" for Mexico, Latin America's second largest economy, in that it meant economic fundamentals were improving.
Mexico also was well prepared to weather a change in Fed policy, although, as an open, integrated emerging market, it was prepared for some volatility, he said.
Videgaray said he expected the IMF to make a decision on whether to renew Mexico's flexible credit line by the end of November, but noted it was only one of the country's liquidity buffers.
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