Mexico central bank increases hedge auctions to support peso

MarketsAssociated Press

Mexico's central bank says it's moving to bolster the peso, which has taken a beating from uncertainty related to renegotiation of the North America Free Trade Agreement.

The bank said Wednesday it will increase the peso coverage contracts it auctions to cushion the risk of holding pesos, which recently fell as low as 19.28 per dollar before recovering.

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The bank will add $4 billion to the initial offering of $1 billion in non-deliverable forward contracts, which are renewable.

The auctions will be held weekly between Oct. 26 and Dec. 6.

The peso dipped as low as 22 to $1 early this year, but recovered to as high as 17.50. But after NAFTA talks hit an apparent impasse, the peso has slipped below the previous resistance level of 19 to $1.