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Mexico: peso devaluation helps foreign investment

Mexico: peso devaluation helps foreign investment

The sharp devaluation of the peso is spurring foreign companies to step up investment in Mexico, a Mexican official said Tuesday.
The country's direct foreign investment is still expected to decline to around $15 billion this year from $18.6 billion in 2008.
But Bruno Ferrari, the director of ProMexico, the country's investment promotion agency, says some foreign companies are stepping up the pace of their spending to take advantage of the peso's decline.
"It costs them less to invest in Mexico with the low exchange rate like the one we have right now," Ferrari said. "There are sectors that are taking advantage of that as much as they can," citing the aerospace, medical and renewable energy firms as examples.
The peso traded at 15.27 to the dollar on Tuesday, down from a high of 9.93 in August.
Six companies that had left Mexico for Asia have expressed interest in returning, in part because of the devaluation, Ferrari said.
Ferrari said no foreign firms have canceled investment plans due to the wave of drug-gang violence that has claimed more than 7,200 lives since January 2008.
On Monday, President Felipe Calderon announced about $800 million in new investments by French companies in Mexico.
But Ferrari acknowledged that the global crisis has caused three companies to hold off on about $300 million in investments in the automotive and energy sectors.


Updated : 2021-01-26 05:44 GMT+08:00