Banxico opens to intervene in the Mexican peso in case of “extreme” volatility

MADRID (EUROPA PRESS).- Mexico could intervene to restore order if the volatility of the currency market becomes “extreme,” according to the governor of the country’s central bank, Victoria Rodríguez.

The governor’s statements came amid the high volatility that the Mexican peso has been experiencing in recent weeks, which has led global losses. However, Rodríguez did not commit to intervene.

Possible intervention mechanisms include a $30 billion currency hedging program that could be implemented by the Foreign Exchange Commission, led by a group of senior finance officials, including herself.

However, monetary flexibility remains one of the pillars of Mexico’s economic system, so the bank would not target any particular exchange rate.

“The Bank of Mexico will be very attentive to the development of our markets and to the possibility that they show atypical behavior or extreme volatility. In the event of any eventuality that warrants it, it could take the necessary measures, of course, to reestablish orderly behavior. of them,” he said.

Any intervention of this type could be carried out by the bank alone or in coordination with other entities such as the Foreign Exchange Commission.

Among the factors that have contributed to the recent movements of the peso are the war in the Middle East, the delay in cutting rates by the Federal Reserve and “idiosyncratic factors”, which the governor did not want to delve into, however. explicitly mention the recent elections in Mexico.