| SAO PAULO
SAO PAULO Feb 3 Emerging and developed
economies need to be ready for U.S. interest rates to rise
eventually and tighten financial conditions worldwide, Mexico's
central bank deputy governor Manuel Ramos-Francia said on
"What is probably very certain is that interest rates in the
U.S. are going up, and interest rates in the rest of the world
are going up," Ramos-Francia said at an event sponsored by
Credit Suisse in Sao Paulo.
"The 10-year T-bill rate right now is a little bit below 3
percent ... this means that T-bill rates have at least 200-250
bps to go further up"
Ramos-Francia did not elaborate on the strategy of Mexico's
central bank, which on Friday kept interest rates on hold at a
record low of 3.50 percent, even though inflation
breached the bank's target ceiling, as it seeks to underpin a
nascent economic recovery.
"Mexico is trying to have this process of increase in
interest rates as orderly as possible," Ramos-Francia said.
Speaking to an audience comprised mostly of Brazilian
executives and investors, Ramos-Francia stressed the importance
of the recent overhaul in Mexico's oil sector, which he said
will be key in attracting foreign investment and making Mexico
"Mexico cannot afford not to explore shale gas in our huge
shale and oil fields in the north," he said. "We have to do it
very quickly, because the U.S. is doing it."
The opening up of Mexico's ailing, long-shuttered energy
sector is widely seen as the most important reform passed by
Mexican President Enrique Pena Nieto, who also pushed a series
of reforms though Congress last year including overhauls to
telecommunications, education and the banking sector.
Mexico's crude output peaked at 3.4 million barrels per day
in 2004 and has since fallen by more than a quarter.
The government says the overhaul, which is still being
definitively mapped out but would allow private investors to
pump money into the oil, gas and electricity sectors, is vital
to boosting growth that has long lagged behind regional peers.
Pena Nieto's administration is hoping Congress will approve
the secondary laws, which will give pointers as to how lucrative
a range of new contracts to be offered to oil majors will be, by
the end of this legislative period.
The period began last week and runs through the end of