Mexico Peso Volatility Falls as Investors Await Energy Law Rules

Mexico’s peso volatility dropped for a sixth day as investors awaited the presentation of proposed regulations to put into effect constitutional changes that were enacted to support growth.

Three-month historical volatility, a measure of the peso’s fluctuations during the period, declined to 9.2 percent today, according to data compiled by Bloomberg. The peso appreciated 0.2 percent to 13.0301 per U.S. dollar, the biggest advance against the dollar among the greenback’s 16 most-traded counterparts.

Investors are waiting for President Enrique Pena Nieto to propose rules for implementing constitutional changes to open the energy industry, which his administration predicts will boost growth by 1 percentage point by the end of his term. Finance Minister Luis Videgaray had said he wanted the measures, known as secondary laws, to be presented and passed by next week, when the current congressional session ends.

“The market is waiting for the passage of the secondary laws,” Ramon Cordova, a trader at Banco Base SA, said in a telephone interview.

The head of the Senate’s energy committee said last week that a special session would be needed to consider the government’s energy proposal.

The yield on peso securities maturing in 2024 rose four basis points, or 0.04 percentage point, to 6.24 percent today. The price fell 0.39 centavos to 129.17 centavos per peso.

To contact the reporter on this story: Ben Bain in Mexico City at bbain2@bloomberg.net

To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net Bradley Keoun, Richard Richtmyer

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