Government of Mexico renews contracts with rating firms despite AMLO dislike of agencies

The Presidency of the Republic revealed what the rating firms Fitch and S&P will charge for continuing to evaluate the economic performance of the current administration, at least until 2022

This month the Government of Mexico renewed the contracts with the rating firms Fitch and S&P to continue evaluating the economic performance of the current administration, at least until 2022.

According to an information card distributed by the Presidency of the Republic, both companies will charge the Government of Mexico 300 thousand dollars for their work in the periods 2019-2020 and 2020-2021, while for 2021-2022 the payment will be raised to 310 thousand dollars.

In the case of Fitch, the contract was renewed on October 23; while with S&P the contract will be closed this Friday.

The contract with the rating firm Moody’s was renewed on May 15, 2018, for similar periods and payments as with Fitch and S&P.

The companies operate and provide services on analysis, evaluation, and determination of the credit quality of the Government of Mexico.

Its function is to inform the market about the real risks that investors face when acquiring Mexican debt.

The ratings, however, are not recommendations for buying or selling.

In his morning press conference, President Andrés Manuel López Obrador said that the renewal of contracts with firms is to demonstrate that punishments are not punished or retaliated against rating agencies even though they disagree with their estimates, It would be a bad message for financial markets.

What should be very clear is that we respect all the recommendations, criteria, qualifications, decisions made by financial organizations, and especially the decisions taken by the Bank of Mexico, which has autonomy and we respect that autonomy, that independence. ” , sentenced the president.

Throughout his administration, the president has constantly disqualified the estimates made by the rating agencies and insisted that during the previous governments they did not take into account the level of corruption that was lived in the Government of Mexico.

Source: excelsior, expansion

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