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Wednesday, December 6, 2023

Mexico’s President backs US dollar as world’s ‘reserve currency’

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Mexican President Andres Manuel Lopez Obrador expressed confidence in the US dollar on Monday when asked whether a weaker dollar could prompt a move to diversify Mexico’s foreign exchange reserves.

“We will continue to treat the dollar as the primary currency of the world,” López Obrador told a news conference.

“We have good reason not to switch to another currency,” he said, stressing that Mexico’s economic ties with the United States “are getting closer.”

The United States has been Mexico’s largest trading partner, with decades of tight integration in sectors ranging from energy, automobiles and agriculture.

The dollar weakened against most major currencies on Monday as concerns over a possible US recession later this year continued.

Asked whether the central bank would recommend diversifying Mexico’s foreign exchange reserves, López Obrador said, “Even in the face of future financial crises, the dollar will remain the most important currency in the world.”

Despite recession concerns, positive economic data helped push the Mexican peso to its highest level against the dollar since 2017 on Friday.

The Mexican president’s comments came after fellow leftist Brazilian President Luis Inacio Lula da Silva expressed support for an alternative to the US dollar for trade in some contexts, including South America.

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