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31 Jul 2015
Banxico changes FX intervention scheme – BBH
FXStreet (Edinburgh) - Analysts at BBH have reviewed the recent announcements from the Mexican central bank.
Key Quotes
“Banco de Mexico announced changes to its FX intervention program, which had been rumored since last week”.
“Extraordinary dollar auctions will now be triggered by a 1% depreciation from the previous day's fix (vs. 1.5% previously)”.
“Regular daily dollar auctions were increased from $52 mln to $200 mln. While we were not surprised by the changes, the announcement was enough to start a short-covering rally for the peso, which earlier in the day had hit a new all-time low near 16.50”.
“It's important to stress that the measures are really meant to provide extra liquidity in disorderly markets, and are not meant to protect a level or to reverse the trend”.
Key Quotes
“Banco de Mexico announced changes to its FX intervention program, which had been rumored since last week”.
“Extraordinary dollar auctions will now be triggered by a 1% depreciation from the previous day's fix (vs. 1.5% previously)”.
“Regular daily dollar auctions were increased from $52 mln to $200 mln. While we were not surprised by the changes, the announcement was enough to start a short-covering rally for the peso, which earlier in the day had hit a new all-time low near 16.50”.
“It's important to stress that the measures are really meant to provide extra liquidity in disorderly markets, and are not meant to protect a level or to reverse the trend”.