HIGHLIGHTS-Interview with Mexico Finance Minister Videgaray

Sat Apr 20, 2013 1:55pm EDT

WASHINGTON, April 20 (Reuters) - The following are
highlights of a Reuters interview with Mexican Finance Minister
Luis Videgaray on Saturday. For a story on the interview, see
.
    
    ON FISCAL REFORM IN MEXICO:
    "We've made a decision not to talk about fiscal reform yet,
not even to the ratings agencies. It's important to have a good
technical design but also to be quite sensitive to the political
needs of the fiscal reform. The first to know about the design
of the fiscal reform ... should be Congress."
    "We have some very good progress on what we are planning to
do on fiscal reform .. (but) we are not talking about it yet."
    "It will be large."
    
    ON NEGATIVE SPILLOVERS FROM MONETARY EASING IN OTHER
COUNTRIES:
    "It is a fact that unconventional, prolonged monetary easing
may lead and may already be leading in some countries to an
unsustainable appreciation of asset prices and these are
negative side effects to what was the proper response to an
unprecedented crisis."
    "It's clear that advanced economies are not ready yet to
abandon this state of monetary easing and it is in the best
interest of developing countries for advanced economies to
continue to support these policies in terms of growth."
    "It's not only about restricting advanced economies in their
monetary policy but it's also about how developing countries
react in terms of their own regulation. It's a challenge and
it's going to continue to be a challenge."
    
    ON U.S. FISCAL CONSOLIDATION AND MEXICO'S GROWTH:
    "We are quite concerned about a low growth scenario in the
U.S. Our economy is significantly more linked to the U.S. than
to any other economy, so it's in our best interests for the U.S.
to continue growing."
    "A degree of flexibility is needed as long as the objective
of fiscal consolidation remains. So therefore while Mexico is in
a much better position itself on the fiscal front, you need to
be careful not to hamper the growth prospects of advanced
economies, particularly the United States."
    
    ON THE VALUE OF THE PESO:
    "It has to do with expectations for the Mexican economy, the
strength of future growth, but it also has to do with monetary
conditions elsewhere so it's hard to pin down how much of one
effect is domestically driven and how much is an effect of the
... liquidity abundance coming from elsewhere."
    "Japan's decision to ease monetary policy is also affecting
everybody. Our thinking is that the peso is set in a
free-floating regime and our involvement is to make sure the
market works well and in an orderly manner."
    
    ON USING PUT OPTION AUCTIONS TO REIN IN THE PESO:
    "We're open to all policy actions depending on the
circumstances, but it's not something that was considered given
the macroeconomic conditions at this meeting."

    ON EFFORTS WITHIN THE G20 TO COMBAT TAX AVOIDANCE:
    "We were hoping for more specific language. We were hoping
for a commitment to adopt this mechanism, or at least express an
interest, by our next meeting in St. Petersburg. That
unfortunately was not part of the communique."
    "We need to have multilateral levels for information
exchange." 
   "This would be extremely useful for a small, open economy
like Mexico."
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