Mexico Trying to Control a Falling Peso

Mexico’s central bank auctioned off $200 million to shore up the peso Friday as it neared a six-year low against the U.S. dollar this week.

The peso came under new pressure on news of increased job creation in the United States, suggesting an improving U.S. economy. Analysts forecast that could lead to a possible hike in U.S. interest rates, an expectation that creates greater demand for dollars in Mexico.

The central bank announced in December that it would hold daily dollar auctions of $200 million whenever the peso sheds 1.5 percent or more of its value from the previous day. Friday was the second time since then that the auction mechanism was triggered.

The dollar was trading at 15.4 pesos in the morning after closing at 15.2 the previous day.

According to central bank statistics, the peso hit a low of 15.49 to the dollar on March 9, 2009.

Puerto Vallarta News

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