Mexico's Carstens says 'implicitly' weighing risk of Trump victory


MEXICO CITY (Reuters) - Mexico central bank governor Agustin Carstens said on Friday he is "implicitly" factoring in the possibility of Republican hopeful Donald Trump becoming U.S. president in the bank's economic risk models.

In an interview with El Financiero/Bloomberg Carstens was asked whether the chances of Trump, a persistent critic of the North American Free Trade Agreement, becoming the next president of the United States was in the central bank's risk models.

"Well, explicitly, no," Carstens said. "But implicitly all of us have it in our heads, this possibility."

Carstens was also asked about Mexican monetary policy in the coming months after the bank launched a surprise rate hike on Feb. 17 to shore up the peso currency, which had been falling sharply against the dollar since the end of 2014.

He reiterated that the February move was not the start of a monetary policy tightening cycle, but that the bank would be following moves by the U.S. Federal Reserve closely.

"Our monetary policy will above all be led by ... the exchange rate, the monetary policy relative to the United States and the inflationary pressures that could occur due to the economic cycle in Mexico," the central bank governor said.

Trump, front-runner to win the Republican presidential nomination for the Nov. 8 election, sparked outrage in Mexico with campaign vows to slap tariffs on Mexican exports and to build a southern border wall and make Mexico pay for it.

Mexican President Enrique Pena Nieto said this month his country would not pay for Trump's proposed wall along the U.S.-Mexico border, and likened his "strident tone" to the ascent of dictators like Adolf Hitler and Benito Mussolini.

(Reporting by Gabriel Stargardter and Dave Graham; Editing by Richard Chang and Sam Holmes)

This article was funded in part by SAP. It was independently created by the Reuters editorial staff. SAP had no editorial involvement in its creation or production.

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