Mexico Peso Leads Gains as Banxico Said to Sell Dollars to Banks

  • Central bank looking to strengthen Mexican peso: official
  • Total amount to be sold not yet determined, official says

Mexico’s peso led world gains, climbing the most in more than four years, as Banxico was said to sell dollars directly to banks to support the currency.

The total amount of dollars to be sold still hasn’t been determined, according to a central bank official who asked not to be named because the details weren’t public. The currency, which last week fell to a record low, jumped 3.3 percent to 18.2822 per dollar at 10:37 a.m. in Mexico City.

The intervention on the currency market this Wednesday is unusual, considering Banxico’s policy of selling as much as $400 million daily at price triggers of declines greater than 1 percent and 1.5 percent against the dollar. That regular intervention hasn’t tamed expected swings in the currency, with one-month implied peso volatility surging to a more than two-year high earlier this month.

“This, of course, is a huge change in policy,” Benito Berber, a strategist at Nomura Holdings Inc., said in an e-mail. “In the past, Banxico officials have really rejected the idea of intervening in this way.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE