Oct. 9 (Bloomberg) -- Mexico’s peso may rally after Congress approves a budget that helps reduce the country’s budget deficit, said Alejandro Diaz de Leon, the chief administrator of pension fund Pensionissste.

The currency may strengthen beyond 13 pesos per U.S. dollar, Diaz de Leon, who manages 110 billion pesos ($8.3 billion) at the government workers’ pension fund, said in an interview at the Bloomberg office in Mexico City.

The Congress is set to approve a budget by Nov. 15 as the deepest economic slump since the 1930s reduces tax collection and output falls at the state oil monopoly. The government’s budget proposes tax law changes that would generate 176 billion pesos in additional revenue next year and spending cuts of 218 billion pesos.

“It’s possible to anticipate” gains in the peso after lawmakers approve the 2010 budget, Diaz de Leon said.

Pensionissste, which begun buying securities in March, is only purchasing peso debt, Diaz de Leon said. The fund is buying inflation-linked bonds and debt sold by Petroleos Mexicanos, Infonavit, Fovissste and Comision Federal de Electricidad, he said.

The peso fell 0.4 percent to 13.307 at 5:33 p.m. in New York, from 13.2512 yesterday.

To contact the reporter on this story: Carlos M. Rodriguez in Mexico City at carlosmr@bloomberg.net.

Last Updated: October 9, 2009 17:34 EDT