Mexico Does Not Rule Out Further Dollar Sales to Prop up Peso

CurrenciesReuters

Mexico's financial authorities do not rule out future discretionary interventions to boost the country's slumping currency, the currency commission said on Thursday, after selling dollars to help the peso.

The currency commission, which includes the central bank and finance ministry, said dollar sales on Thursday were aimed at ramping up liquidity and limiting recent volatility, after the peso hit a fresh record low. (Reporting by Alexandra Alper and David Alire Garcia; Editing by Chris Reese)

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Below is an earlier reported version from Dow Jones:

The Bank of Mexico sold dollars to support the peso Thursday, its first exchange-market intervention in almost a year after the peso hit new lows on fears that protectionist measures by the incoming administration of U.S. President-elect Donald Trump could hurt the country’s trade and investment.

A central-bank official confirmed the bank was active in the exchange market early Thursday.

The peso sank to an all-time low against the dollar this week after Ford Motor Co. said it was canceling a planned $1.6 billion investment in a new assembly plant in Mexico that had been criticized by Mr. Trump.

The decision led to concerns that other investments could be discouraged, limiting a source of foreign income in Mexico.

The Bank of Mexico last intervened in the exchange market in February 2016, when it sold $2 billion to support the peso, which had hit new lows on the decline in oil prices. Lower oil prices affect Mexico’s trade balance and federal government revenue.

The peso was trading in Mexico City at 21.2790 to the dollar around 9:30 a.m. EST, according to Infosel, compared with 21.5260 at the close Wednesday.

By Anthony Harrup

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