The Mexican peso fell for a third straight day, headed toward its lowest close on record and prompting the central bank to sell $200 million in extraordinary foreign-exchange auctions to slow the currency’s slide.
The peso weakened 0.3 percent to 16.3533 per dollar as of 1:06 p.m. in Mexico City. The dollar sales were triggered after the currency’s level weakened more than 1 percent beyond Tuesday’s official fixing of 16.1736.
The most-traded currency in emerging markets has tumbled 9.7 percent this year, for reasons that include a growing aversion to riskier assets and the plunge in oil prices, which has damped the outlook for energy investment.
Wednesday’s extraordinary auction was the first since the central bank last week lowered the daily threshold to a 1 percent decline, from 1.5 percent. Only three auctions had been triggered at the previous level since the program was started in December.
The extraordinary auction was in addition to the $200 million that the central bank sells each day. That amount also was raised last week.
On Tuesday, RBC Capital Markets analyst Daniel Tenengauzer wrote in a note to clients that the Mexican central bank’s plan to support the peso is insufficient, and that policy makers need to show more courage to stem the peso’s fall.
bloomberg.com
The peso weakened 0.3 percent to 16.3533 per dollar as of 1:06 p.m. in Mexico City. The dollar sales were triggered after the currency’s level weakened more than 1 percent beyond Tuesday’s official fixing of 16.1736.
The most-traded currency in emerging markets has tumbled 9.7 percent this year, for reasons that include a growing aversion to riskier assets and the plunge in oil prices, which has damped the outlook for energy investment.
Wednesday’s extraordinary auction was the first since the central bank last week lowered the daily threshold to a 1 percent decline, from 1.5 percent. Only three auctions had been triggered at the previous level since the program was started in December.
The extraordinary auction was in addition to the $200 million that the central bank sells each day. That amount also was raised last week.
On Tuesday, RBC Capital Markets analyst Daniel Tenengauzer wrote in a note to clients that the Mexican central bank’s plan to support the peso is insufficient, and that policy makers need to show more courage to stem the peso’s fall.
bloomberg.com
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