Mexico's ratings are constrained by: An inconsistent fiscal/monetary policy mix. The relatively lax fiscal policy in 2000—despite the higher-than-budgeted price of oil, an acceleration in aggregate demand, and a large increase in the nonoil current account—led the Bank of Mexico (Banxico) to adopt a tightening bias in monetary policy in order to reach its inflation target. This policy mix resulted in undesirably high real interest rates and an appreciating currency, hindering domestic growth and making the economy more vulnerable to negative exogenous shocks in 2001. Weak public finances. The public-sector borrowing requirement (PSBR; used by Standard&Poor's as a measure of the government's fiscal stance) was 4% of GDP in 2000. The large fiscal imbalance, the high fiscal dependence
