ABSTRACT
Most thoughtful observers including the principal international financial institutions agree that the private sector must play a major role in any recovery of the Mexican economy. This view has also become an established feature in the official discourse of Mexico’s economic authorities, who have openly acknowledged the need for more market-oriented policies in such important areas as external trade, financial intermediation and public enterprise. The Mexican government is being urged by some business interests to use its exchange rate policy as a shelter for “infant exporters” that may never find it convenient to attain the size and efficiency required for true international competitiveness. Mexican authorities have learned since 1982 that the key to preventing domestic demand from overwhelming exports, thereby inducing excessive imports and fostering speculation in the foreign exchange market, lies in fiscal and monetary restraint.
