Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Mexico Plan Will Send Rates Soaring

NEW YORK -- The United States is preparing to announce measures to save Mexico from its currency crisis that will send the country's interest rates soaring to as much as 50 percent, The New York Times reported Monday.

The plan was still being negotiated Sunday evening after three days of talks between Secretary of the Treasury Robert Rubin and Mexico's Finance Minister Guillermo Ortiz.

Mexico's peso strengthened late last week on rumors that the talks were taking place.

To receive $20 billion that the Clinton administration is offering, officials told the Times, Mexican President Ernesto Zedillo Ponce de Leon's government is agreeing to reduce his country's money supply, even if it means charging interest rates of 50 percent or more on loans to businesses and on home mortgages.

Also, under a draft proposal of the agreement, the United States would control the flow of the billions of dollars that Mexico earns each year from oil exports, beginning later this year.

By agreeing to the plan, Zedillo runs the risk of angering people at home who say he would be allowing the United States too much power over Mexican economic policy.

Interest rates, meanwhile, are already running above 40 percent, which analysts said could touch off a recession and social unrest.