BU Country Risk Analysis Mexico Currency Exchange Rate System & Controls Essay

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Economics

Brock University

Question Description

Country Risk Analysis :You will examine the country from the perspective of a possible location for direct investment on the part of your firm. The purpose of this part of the report will be to provide a country risk assessment. This will involve outlining the economic, regulatory, and political stability of the country as well as any social and cultural risk factors that might help in determining the general level of risk. In general you are examining the country in terms of two aspects of risk – that or expropriation and also credit risk. You report should include brief summaries of the following topics.

You should be written in Times Roman 12 point font, with single line spacing. Need , table of contents, references and appendices.

  • Currency exchange rate system and any currency exchange controls
  • Any limitations on foreign currency transfers
  • Geopolitical issues – potential tensions with neighboring countries
  • Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

    Final Answer

    Attached. Please let me know if you have any questions or need revisions.

    Running head: COUNTRY RISK ANALYSIS

    Country Risk Analysis: Mexico
    Student’s Name
    Institutional Affiliation

    1

    COUNTRY RISK ANALYSIS

    2

    Table of Contents
    Table of Contents ...........................................................................Error! Bookmark not defined.
    Country Risk Analysis: Mexico ...................................................................................................... 3
    Introduction ................................................................................................................................. 3
    Brief History of Mexico .............................................................................................................. 3
    Economy ..................................................................................................................................... 3
    Domestic Stock Market............................................................................................................... 4
    Political and Regulatory Risk ..................................................................................................... 4
    References ................................................................................................................................... 5
    Appendices .................................................................................................................................. 6

    COUNTRY RISK ANALYSIS

    3
    Country Risk Analysis: Mexico

    Introduction
    Country risk analysis, also known as country risk assessment, is a useful tool for
    companies considering entering the global marketplace. The evaluation describes and determines
    a country’s ability to transfer payments. It also integrates macroeconomic variables such as the
    country’s interest rates, stock market, and currency exchange rate. According to Coface (2020),
    Mexico's business climate rating is A4, while its risk rating is C, implying an overall acceptable
    risk environment despite deficiencies in debt collection, intercompany transactions, and
    corporate financial information (Appendix 1). Therefore, the risk analysis of Mexico provides
    useful information about the country’s business environment.
    Brief History of Mexico
    Mexico is a country in North America. Its existence dates back to the Amerindian
    civilizations. Mexico is the 15th largest country in the world in terms of landmass (CIA, 2020).
    The country borders the United States, Belize, and Guatemala. Mexico is a former Spanish
    colony, and it gained independence in the early 19th century and established Mexico City as its
    capital. As of 2020, the country had 128.65 million people, becoming the 10th populous in the
    world. The population is relatively young, with a median age of 29.3 years. According to the
    Central Intelligence Agency, 92.71 percent of Mexicans speak Spanish, and most of them ascribe
    to Roman Catholic (CIA, 2020).
    Economy
    Mexico has the second-largest economy in Latin America. It adopted an open trade
    policy and has signed free trade agreements with 46 countries, including the United States.
    Mexico is also oriented to the North American Free Trade Agreement (NAFTA). As of 2017,
    the country’s GDP (Purchasing Power Parity) was estimated to be $2.46 trillion, and the 11th
    largest in the world (CIA, 2020). Even so, Mexico’s economic growth has slowed down in the
    last three decades. According to the World Bank (2020), the country’s economic growth
    averaged 2 percent between 1980 and 2018. This has contributed to its underperformance in
    dealing with poverty and economic inclusion.
    The economic environment in Mexico is expected to improve in the future. According to
    Coface (2020), the country’s GDP growth in 2020 is projected to show timid improvement due
    to the planned ratification of the United States, Mexico, and Canada Agreement (USMCA).
    Ratification of the agreement will ease the monetary cycle, reducing lending rates and increasing
    public ...

    funqtrr (2674)
    University of Virginia

    Anonymous
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