Mexico market volatility could ease if Trump situation 'resolves itself': cbank governor

October 12, 2016 11:16 PM EDT

Mexico's central Bank Governor Agustin Carstens speaking at an event in Mexico City, Mexico May 31, 2016. REUTERS/Henry Romero

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MEXICO CITY (Reuters) - Mexico's central bank governor Agustin Carstens said on Wednesday that volatility in local markets could ease if the situation involving U.S. Republican Presidential hopeful Donald Trump "resolves itself."

Noting that Trump has made "very specific" comments about Mexico, Carstens told local radio that "everything points to this resolving itself and let's hope that is the case. And from then on, I expect that we could see much less volatility in our markets."

Trump has made disparaging comments about Mexicans and vowed to build a wall on the United States' southern border and make Mexico pay for it.

Carstens also said the peso , which has rebounded off a record low last month, has been boosted by the central bank's decision to hike rates by 50 basis points last month, as well as Trump's slide in the U.S. presidential race.

A Reuters/Ipsos poll this week showed that Trump now trails Democratic nominee Hillary Clinton by 8 points, compared to 5 points last week, with one in five Republicans saying his vulgar comments about groping women disqualify him from the presidency.

Mexico's central bank raised interest rates to 4.75 percent in September, in an effort to counter inflationary pressures, while also flagging possible risks from U.S. monetary policy, the U.S. presidential election and oil prices.

(Reporting by Alexandra Alper and Jean Luis Arce; Editing by Kim Coghill)

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