May 2011 ~ Mexican central bank buys 100 tonnes of gold November 29, 2011
Mexico's Central Bank to Back Peso
Mexico's central bank will begin selling dollars to support the peso on days the currency comes under heavy pressure, a move that shows how Europe's financial crisis is forcing even the most orthodox central banks to become more active in the markets.
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The Bank of Mexico will sell as much as $400 million a day in the exchange market on days when the peso is 2% weaker than the previous session, the country's foreign exchange commission said on Tuesday. The commission is made up of members of the Bank of Mexico and the Finance Ministry.
The decision to reinstate dollar sales, which had not been used here since the last global financial crisis in 2008-2009, comes after the peso recently fell to its weakest level against the U.S. dollar since March 2009, largely as a result of risk aversion brought on by the debt crisis in Europe.
The peso rallied on the news to 13.76 in late afternoon trade compared to 14.05 at the close Monday.
Mexico's central bank has a reputation as a very conservative institution that tends to shy away from signaling a price for the peso. Rather, it tends to let the markets set the price.
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