Bloomberg: Mexico Planning Intervention as Peso Weakens to Two-Year Low Isabella Cota - Bloomberg
go to original December 9, 2014

Mexico’s central bank revived an intervention program designed to curb foreign-exchange volatility after the peso fell to a two-year low.

Policy makers will auction $200 million on days when the peso weakens at least 1.5 percent from the previous close, the central bank said today in a statement. A similar measure to support the local currency was put in place in November 2011 and was used just three times before ending in April last year.

The peso, which pared today’s losses after the announcement, is still down 10 percent over the past six months on concern that a drop in oil prices will damp investment in the country’s energy industry. The new program to support the peso surprised investors including Juan Carlos Alderete, a currency strategist at Grupo Financiero Banorte SAB in Mexico City, after Finance Minister Luis Videgaray said last week that he didn’t see a need for intervention.

...Monday, the peso weakened 0.2 percent to 14.3834 per dollar at 3:30 p.m. in New York after earlier dropping as much as 0.7 percent to the lowest intraday price in two years.

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