Yesterday the Bank of México (Banxico), the country’s central bank, revived an intervention program designed to curb foreign-exchange volatility after the peso fell to a two-year low.
Banxico said in a statement it will offer $200 million a day at an auction that would be triggered whenever the value of the peso drops more than 1.5 percent from the previous session’s fix rate.
The Mexican peso has been steadily losing value against the dollar, but after the announcement it reversed its losses to gain slightly and then trade about flat.
In an interview the Central Bank Governor Agustin Carstens implied that the bank may have to raise interest rates if the currency slump affects consumer prices.
Carstens said that so far this morning parity stood at 14.36 pesos per dollar, against 14.46 pesos yesterday, “the exchange rate has stabilized,” he said.
(from Milenio)
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