LatinNews Regional Monitor: Mexico - 19 March 2020

* Mexico’s central bank (Banxico) announced on 18 March that it was auctioning an additional US$2bn in the domestic currency market to stabilise the exchange rate. The announcement came after the value of the Mexican peso fell to M$23.17/US$1, a record low, amid the ongoing volatility in financial markets over the coronavirus (Covid-19) pandemic. An official joint statement by Banxico and the finance ministry (SHCP) said that the aim of the intervention was to ensure the liquidity and orderly functioning of the currency market. It adds that Banxico is prepared to continue with dollar auctions for as long as it considers it to be “pertinent”. But Banxico’s actions have not stopped the peso’s slide, as it fell by 3.28% to M$23.93/US$1 at the close of trading on 18 March, after briefly breaching the M$24/US$1 threshold during the day.

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