The Day at a Glance | May 11 2020

China`s Central Bank acts with less caution

The People`s Bank of China announced that it will use more aggressive tools to face the economic challenges the pandemic requires in its quarterly monetary policy report. The bank also announced that it will carry out a more precise follow up regarding the economy`s growth and unemployment levels when it makes monetary policy decisions, reducing the relevance of other objectives such as controlling the economy`s level of debt, which confirms a less prudent stance on behalf of the central bank as time moves forward and greater flexibility in its monetary policy. Compared to other economies, the stimuli carried out by the Chinese central bank in light of the recession has been done at a much smaller scale, concentrating on guaranteeing liquidity in markets and the banking sector. It`s expected the bank will take more decisive actions as time moves forward, and it has assured it will focus its attention on helping the economy return to its path of growth. Nevertheless, the bank did not reveal details concerning the new measures it will carry out. The bank is concerned about the pandemic having a deeper and longer lasting effect on the economy and that the 2Q20 will also show a contraction due to the limited recovery in domestic demand and a collapse of the global economy. At the end of the moth, China will have its annual parliamentarian meeting, in which it`s expected to adjust its macroeconomic policy, according to statements made by the country`s Premier, Li Keqiang on Monday.

Foreign exchange earnings and the number of international visitors in Mexico drop

According to figures published by the INEGI on Friday, the number of internationals visiting Mexico as well as foreign exchange earnings dropped in March due to a fall in tourism activities. The number of tourists visiting the country fell an annual (-) 34.4%, while foreign exchange earnings dropped (-) 45.6% annually. The group that recorded the largest contraction was tourists that enter the country via air-travel, which represents up to 82.8% of the total amount of tourists that enter the country. During March, the total amount of tourists dropped (-) 51.5% annually, as foreign exchange earnings also fell (-) 51.5% to 1,012 million dollars. The number of bordering tourists (-15.5%) and those who enter the country by land (-36%) also decreased – as well as foreign exchange earnings (-1.1% and -35.5%, respectively). These figures confirm the pandemic`s negative impacts in one of the most dynamic and important sectors of the Mexican economy.