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

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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