Today the Mexican Central Bank (Banxico) auctioned $400 million at an prorated 13.1204 pesos per dollar. This latest auction rounds up the $1.9 Billion offered to the market today. The morning’s auction was at a prorated 12.9565 pesos per dollar. Last week Banxico sold off $8.9 Billion dollars to keep the local currency under control using the nation’s record foreign exchange reserves.
Banxico’s Governor Ortiz gave a television interview in which he outlined that the auctions will continue but are looking for other alternatives as they seem to be nearing their end. The $84 Billion in Foreign Reserves will not be enough to stave off the market forces from depreciating the peso
Mexico’s country risk has increased by 35 points to reach 358, close to a 5 year high. Mexico’s corporation are reporting heavy foreign exchange losses as the result of the sudden depreciation. Cemex the third largest cement company in the world has posted half a billion losses so far.
Political pressure has also being added into the mix. After the Minister of Finance commented on Corporations profiting from the Peso movements representatives from various national parties are asking the Regulatory Bodies to Ã¢â‚¬Å“name namesÃ¢â‚¬Â. After realizing the implications from his statement, the Minister has ignored further questioning.