Mexico Spent $4 Billion To Defend The Peso Last Week...And This Is What They Got

Tyler Durden's picture

Mexico's central bank spent over $4 billion last week in an effort to support the collapsing peso during U.S., Mexico and Asian tradin, according to El Economista.

Gabriel Gerzstein, a strategist at BNP Paribas, estimated that opening an episode of dollar sales to "anchor the value of the national currency" could cost about $ 40 billion from the international reserve.


The handling of discretionary dollar auctions, in the context of volatility generated by US protectionist policy, would have to motivate the Exchange Commission to "be much more aggressive and discretionary than in 2015," he explained.


In August, Banxico used a daily auction mechanism that ended up draining $ 27 billion from the reserve in six months.

So far that $4 billion has not stemmed the tide of selling with the peso down 3%...


We're gonna need more intervention.

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LawsofPhysics's picture

Very typical result for government intervention...

Dame Ednas Possum's picture

I could have given them fuck all in exchange for USD 4bn. 

The smile would have been for free. 

philipat's picture

Might be cheaper just to build the fucking wall?

BaBaBouy's picture

""Mexico Spent $4 Billion To Defend The Peso"" & peso plunging...

Soo, Labor in Mehico is getting Cheaper & Cheaper by the day...
More jobs to move to Mehico ???

Mark Urbo's picture

Peso is looking like 25-30 to USD !


American Psycho's picture

mexican peso turning into the Thai Bhat. 

Looney's picture

Slightly OT…

FBI reportedly arrests Volkswagen executive in emissions test scandal

“FBI agents reportedly busted a Volkswagen executive accused of emissions fraud over the weekend in Florida.

Oliver Schmidt was arrested on charges of conspiracy to defraud the United States on Saturday and is expected to be arraigned in federal court Monday in Detroit.”

Lemme get it straight… The whole purpose of the “Lower Emissions Regulations” was, in a nutshell, to save Polar Bears.

Volkswagen and every other car maker have been cheating and NOT lowering the emissions, but the Polar Bears’ population has been steadily increasing.

Hopefully, Rick Perry remembers the name of the department he was hired to neuter.   ;-)


EcoJoker's picture

I'm gonna start the revolution myself if I don't get my buyback money from VW.  

Darktarra's picture

Mexico is going down.  Expect a shooting war on the boarder with Mexico very soon! War takes the citizens attention of their domestic cluster f*ck. 

LawsofPhysics's picture

I suggest you talk to people who live on the border.  The shooting has been going on for quite a while now.

gimli's picture

Could have used that money to buy a nice wall

Ignatius's picture

$4 billion. Money better spent on a wall to keep ungrateful sun seeking American tourists at bay.

insanelysane's picture

And then the Mexicans shot someone at the US embassy.  Obama made no comment as he didn't want to hurt Mexico's feelings.

sidfalco's picture

That's a $4bn downpayment on the cost of the wall. 

orangegeek's picture

Happy Trump-mas Mexico - get ready for the wall.


I wonder why worthless fiat made no difference? It's made of extremely valuable paper so it should have worked.

Aussiekiwi's picture

They can't defend the peso, the more they try the more predatory forex traders will target them, every time they have to take the support away it can be seen immediately and it becomes another opportunity to short the currency, its all bad news for 2017 for the people of Mexico, the wolves are circling.

HoserF16's picture

Four Billion seems like a lot. Did we give them the $4B first?

Four Billion Peso's is like, what, a Buck Twenty five???

Aussiekiwi's picture

It will be by the end of the year, reminds me of something Gerald Celente always says about currency wars. something like, ' currency war,trade wars,world wars' I have always written it off as being way too much of a conspiracy theory for me, but now as I look around the world I start to wonder.

angry_dad's picture
angry_dad (not verified) HoserF16 Jan 9, 2017 10:19 AM

our stoners spent far more than that for the drug cartel products.

svs9000's picture

Should have put that money toward building the wall...

Nobody For President's picture

Just think: another 140 word or less tweet from the pres-elec, and another 2 to 4 billion of reserves vanish.

You just gotta love the internet age - fireside chats at 140 words per....

UnschooledAustrianEconomist's picture

Back in the days you had to send a battle group and have it shell a harbor to get similar impact.

Now you simply let the Big Man type some twitter notes late at night (after watching free online porn).

Wicked world indeed.


alangreedspank's picture

peso in reposado mode

directaction's picture

In 2004 Mexico's oil production peaked at 3.8mb/d. It's been declining ever since. Last year Mexico consumed 2.2 mb/d of oil yet they now produce only 2.1 mb/d. No longer an oil exporter, they are now a net oil products importer. Oil depletion is the root cause of the economic disaster facing Mexico, and it'll only worsen as oil production declines. Tossing money at this problem is seriously counterproductive.   

buzzsaw99's picture

youse guyz who mock the value of the usd should take a closer look at the mexican peso. even mexicans don't like pesos. their $100 coin is made out of a rim of fucking aluminum with a mere 1/2 oz of 92.5% silver in the middle and that is their most valuable currency unit.

Musum's picture

Mexico should enjoy the devaluation and export more stuff. A lower peso, if it makes you more competitive, not bankrupt, can be a good thing.

buzzsaw99's picture

until the peso is worth less than a usa penny and then the rebels come and chop your heads off with fucking meat cleavers.

angry_dad's picture
angry_dad (not verified) Musum Jan 9, 2017 10:18 AM

this means building the wall will cost less

angry_dad's picture
angry_dad (not verified) Jan 9, 2017 10:17 AM

The $4 billion is easily covered by the illegal drugs sold into the usa.

They just rounded up all the $20's from the gringos they had laying around as well as a few $billion more counterfeited notes from Peru.


chosen's picture

It might have stemmed the tide of selling.  The peso might have been down 10 percent instead of 3 percent.

paperstreetsoapco's picture

Que rabid bitcoin comment in 3.....2....

Jeepers Creepers's picture

Maybe instead they could spend some of that money figuring out why so many millions of Mexicans hate their shithole country and want to come to the USA?

newworldorder's picture

Without Mexican peoples remittances sent to Mexico from the US, the peso would lose a substantial amount of its value. 

They know it, the world knows it and more importantly the Mexican people know it.