NATION/WORLD
4B Thursday, January 12, 1995
UNIVERSITY DAILY KANSAN
Recession looms in Mexico
Market has lowest close since 1980s
MEXICO CITY—Mexico, until recently the darling of emerging market investors, suddenly is staring recession in the face.
The abrupt, unexpected devaluation of the peso in late December has been steadily working havoc throughout Mexico's financial system. The latest victim, the stock market, has lost about 21 percent of its value since Jan. 1—more than half of that since Monday.
The Associated Press
The stock market, or Bolsa, ended up closing 6.26 percent lower yesterday, capping a 12.9 percent loss over two days. The last time the Mexican market lost so much in a single day was during global market crashes in the 1980s.
With the devaluation of the peso, which has lost more than one-third of its value against the dollar since Dec. 20, Mexicans who thought the days of double-digit inflation were over have been faced with a new reality.
Inflation, which totaled 7.04 percent in 1994, is projected by President Ernesto Zedillo's government to reach 19 percent this year — and some analysts say it will be higher.
The financial crisis is seen in some quarters as a vote of no confidence in Zedillo's government, which came to power just last month. Analysts say the administration has handled the crisis poorly and failed to keep investors informed of policy changes.
"The government hasn't managed to inject any new confidence," said Gene Frieda, a Latin markets analyst at NatWest Securities in Washington.
Felix Boni of the Mexico City brokerage firm Interaccciones added, "We need clearer details about how
Peso vs. dollar
The Mexican peso has lost nearly one-third of its value in relation to the U.S. dollar since late December.
We Buy, Sell, Trade & Consign 841-PLAY USED & New Sports Equipment 1029 Massachusetts
20 21 22 23 7 27 28 29 30 4 6 5 9 10
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Source: Wall Street Journal the financial situation is going to be taken care of."
Dole's stance upsets North Korea
SEOUL, South Korea — in an unusual personal attack, North Korea called Republican Sen. Bob Dole "a deplorable political ignorantus" for trying to block a U.S.-North Korean nuclear agreement.
The Associated Press
Its sharp criticism of the Senate majority leader reflects the communist nation's unease about the new Republican-controlled Congress.
The Clinton administration says the deal, signed Oct. 21, will settle the question of whether North Korea is developing nuclear weapons.
Under the accord, North Korea is to receive two modern nuclear reactors worth $4 billion, as well as economic aid and U.S. diplomatic recognition. In exchange, North Korea will open its nuclear facilities to international inspections within five years.
Dole is leading a congressional campaign against the deal, arguing that the recent downing of a U.S. Army helicopter that entered North Korean airspace shows that the country cannot be trusted.
But judging from Dole's remarks, "he is obviously a deplorable political ignorant," the report said.
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layhawk Bookstore
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THE UNIVERSITY DAILY KANSAN