Mexico Said to Consider Fed Swap Line; Carstens Denies It
- Fed had authorized swap line for Banxico during 2008-09 crisis
- Banxico said to mull interest-rate swap auctions as well
Peso Shows Resiliency Despite Tension With Trump
Mexico’s central bank is considering requesting a swap line with the Federal Reserve in order to ensure liquidity in peso trading should volatility in the currency jump, according to three people with knowledge of the discussions. Governor Agustin Carstens denied it.
The swap line would come in addition to other liquidity measures being studied by Banxico, which last week announced a series of foreign exchange hedges, triggering a rally in the peso after it touched a record low on Jan. 11, according to the people. A fourth person said interest-rate swap auctions have also been prepared just in case Mexico needs to bolster local currency government bonds in the future. The four people asked not to be named because they aren’t authorized to speak publicly about the matter.