Abstract
Emerging markets with high uncertainty and turbulent environments are always hard to predict. Unlike advanced markets that are not easy to be influenced by the external environment, emerging markets are still immature and likely to be easily affected. The Mexican peso crisis in 1994 is an example that inappropriate monetary policy was taken when the entire financial system was weak in Mexico at that time. In the global emerging market, Mexican peso plays a significant role in maintaining the stability of the foreign exchange market. This paper aims to analyze the current situation of Mexican domestic emerging markets from its economy, the monetary policy of the central bank of Mexico, and foreign exchange aspects. The analysis can provide information for potential investors to make a decision before they decide to invest in the Mexican emerging markets.
Highlights
With the frequently global trades between different countries, more and more developing countries are having a booming economy
When an investor makes a decision whether to invest in the Mexico emerging market, he needs to have a clear understanding towards the ongoing trend of the market, potential risks and profitability
This paper aims to give some analysis to the current Mexico domestic emerging markets based on historical statistic, and to find out if the current Mexican domestic market has a booming future in a short-term, if the central bank of Mexico has the adequate foreign exchange reserve to resist huge capital outflow, if the monetary policy is suitable and up-to-date, and if the volatility of exchange rate is stable or has mildly fluctuations
Summary
With the frequently global trades between different countries, more and more developing countries are having a booming economy. Compared with those developed countries, emerging markets have more unexplored and potential opportunities. A great deal of foreign investors is willing to put their money in the emerging market. When an investor makes a decision whether to invest in the Mexico emerging market, he needs to have a clear understanding towards the ongoing trend of the market, potential risks and profitability. This paper aims to give some analysis to the current Mexico domestic emerging markets based on historical statistic, and to find out if the current Mexican domestic market has a booming future in a short-term, if the central bank of Mexico has the adequate foreign exchange reserve to resist huge capital outflow, if the monetary policy is suitable and up-to-date, and if the volatility of exchange rate is stable or has mildly fluctuations
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