(Recasts with comments on Pemex)
MEXICO CITY, March 6 (Reuters) - Stronger measures are required to revive debt-laden Mexican state oil firm Pemex, though the government is a long way from losing its investment grade credit rating, Mexican central bank board member Jonathan Heath said on Wednesday.
Speaking after a series of recent announcements by rating agencies signaling that Pemex’s weak finances have increased the risks to Mexico’s credit rating, Heath said a recent government plan to help the company looked insufficient.
“The measures we’re seeing address the current situation, and (Pemex) needs structural measures,” Heath told Mexican television. He added, however, that Mexico was “very far” from losing its investment grade credit rating.
Last month, President Andres Manuel Lopez Obrador said the government would inject $3.9 billion into Pemex to prevent a further credit downgrade, shortly after rating agency Fitch cut the company’s rating to just one level above junk status.
Lopez Obrador, a leftist, has pledged to rescue Pemex, which ended 2018 with nearly $106 billion in financial debt as well as billions of dollars in other liabilities.
On Monday, rating agency S&P cut its standalone assessment of Pemex to ‘B-’ from ‘BB-‘, reflecting concern that financial support pledged by the government would not be enough.
S&P argued that Pemex could require at least $20 billion over multiple years to avoid “further deterioration.”
Heath, who joined the central bank’s board earlier this year, is a former private sector economist who has not shied away from criticizing the government.
Minutes from the central bank’s Feb. 7 monetary policy meeting showed that a majority of the bank’s five-member board flagged Pemex’s financial state as a risk for the economy. (Reporting by Adriana Barrera Editing by Dave Graham and Jeffrey Benkoe)
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