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The truth about the Mexican economy...
Last updated: Aug, 7th, 2014
Russia bans food imports from United States and European Union
What has happened  
to the Mexican peso  
in 2014

1/08/14.- In the last 7  
days, the U.S. Dollar has  
increased its value versus  
the Mexican peso in the  
amount of 29 Mexican  
cents, and this movement  
was due to the  
uncertainty regarding  
what the Federal Reserve  
Bank will do regarding its  
Quantitative Easing  
program.  

As the market increases  
its expectations regarding  
an interest hike, most  
currencies have  
devaluated in front of the  
US Dollar, ant the  
Mexican peso is no  
exception.  

It is important to mention  
that although the parity  
closed on July 31st at  
$13.239 pesos per dollar,  
this is still way below the  
lowest value the peso has  
seen this year at  
$13.5110 pesos per dollar  
registered in February  
3rd.       
A global framework  
for volatile flows

There is an ongoing lively  
debate on capital flows,  
given the unconventional  
monetary policies set in  
place in many AEs.  

The IMF has published  
two working papers:  
Ostry et al. (2010) and  
IMF (2012). In a nutshell,  
they see capital controls  
strictly as a  
complementary policy  
tool.

Broadly speaking, they  
recommend that if  
authorities detect  
macroeconomic risks  
accumulating, they  
should respond as follows:  

a. Allow for the ER to  
appreciate.  
b. Accumulate reserves.  
c. Intervene in the ER  
market.  
d. Relax monetary and  
tighten fiscal policies.  
e. If all these are  
exhausted, only then use  
capital controls...Leer  
 
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Agencia NotiLeón. 7/08/14.-  Russian Prime Minister Dmitry Medvedev said today that Russia is imposing a ban on food imports from the European Union (EU) and the United States as a form of  retaliation for their sanctions against Russia over the Ukraine crisis.

The Itar-Tass news agency quoted Medvedev as saying that the Russian government will impose a  one-year ban on imports of beef, pork, poultry, fish, cheeses, fruit, vegetables and dairy products from Australia, Canada, the EU, the United States and Norway.
Medvedev said "The restrictions come into force from today for one year, but if our partners display a constructive approach toward cooperation then the Russian government will be ready to revise the terms of the imposed measures."

However, the new sanctions will not affect commodities that Russian citizens purchase abroad for personal use, such as baby food.

He said that Russia has long restrained from responding to the sanctions imposed by the West.

"Until the very last moment, we still hope that our foreign partners would realize that sanction is the path with the dead-end and nobody needs them. But it turned out that we had to take retaliatory measures," Medvedev said.

"I sincerely hope that our partners will change and stop thinking of intimidating and containing Russia, and that our mutually beneficial trade and economic cooperation will be restored in full," he added.

Russian President Vladimir Putin signed on Wednesday a decree banning or limiting the imports of agricultural products from countries that imposed sanctions on Moscow.
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