Bloomberg - Mexico’s peso surged the most in three weeks after policy makers said they’ll tap $140 billion in reserves to cap declines by Latin America’s most-battered currency over the past six months.
By Jonathan J. Levin, Ben Bain and Nacha Cattan
Mexican policy makers are reverting to a measure they used during the 2008 financial crisis to stem losses in Latin America’s most-battered currency.
Mexico’s currency exchange commission said the central bank will auction $400 million daily of its reserves at a peso exchange rate at least 2 percent weaker than the previous day’s level, providing support for the currency.
The mechanism, which was last used 19 months ago to shore up the exchange rate following the collapse of Lehman Brothers Holdings Inc., is a “preventative” measure designed to provide liquidity to the market during times of volatility, the commission said in a statement.
The bank is “recognizing that there’s too much volatility in the currency and doing something about it,” said Alejandro Urbina, who oversees $800 million of assets at Silva Capital Management in Chicago. “It makes the peso more attractive.”
The peso has lost 16 percent in the past six months, making it the worst performing major Latin American currency. It surged the most in three weeks yesterday after the bank published the statement, climbing 1.5 percent to 13.8230 per U.S. dollar at the close in Mexico City.
Among Mexican women of a certain age, Enrique Peña Nieto is known as a “bombón” – as in their cry at his campaign rallies: Peña Nieto, bombón, te quiero en mi colchón (“Peña Nieto, sweetie, I want you in my bed”).
Among Mexicans more generally, the telegenic 45-year-old is known as Mexico’s most likely next president.
On Sunday, the former governor of the State of Mexico declared his candidacy for next year’s July 1 election. Given that he currently enjoys a 20 point lead in the polls, a Peña Nieto victory looks assured – as does the return to power of his party, the Institutional Revolutionary party (PRI).
For some, this raises fears of a setback for Mexican democracy. After all, the PRI was once a byword for corruption and vote-rigging. The party’s old dinosaurs ruled Mexico for most of the 20th century and now, after an 11 year gap, are about to return – this time with a politician with soap-opera looks to front them.
Such fears are understandable, but overdone. Even if he wanted to, Peña Nieto, could not turn back the clock.
AP — A band of heavily armed teenage car thieves shot it out with officers during a high-speed chase Monday, before crashing their stolen car in the northern industrial city of Monterrey, police said.
EFE - The attorneys general of Mexico and Chile signed a cooperation agreement to bolster efforts to fight transnational criminal organizations, the Mexican Attorney General's Office said.
Dow Jones - Mexico's state-owned oil company Petroleos Mexicanos, or Pemex, said Monday that oil production in the Nov. 1-27 period averaged 2.539 million barrels a day, slightly lower than the 2.553 million barrels a day for the full month of October.
Tax-News - The Organization for Economic Cooperation and Development (OECD) annual report on the tax burdens in place in 2010 shows that Mexico had the lowest tax-to-GDP ratio at 18.7 percent.
LAT - On Sunday, on a wet and frigid morning in Mexico City, hundreds of fans of mystic Alejandro Jodorowsky fans donned black top hats and black shawls, and carried canes and Mexican flags colored in black to honor drug war victims.
PlasticsNews.com - Mexico’s plastics industry association has revised upward its 2011 growth estimate for the sector. In early October it projected growth of 6 percent. Now it says 9 percent is more likely.
AP — A baker, a truck driver, a soft-drink vendor and a dental technician were among the 26 men found bound, gagged, slain and left in the center of Guadalajara. Written in motor oil on the victims' bodies were the names of the Zetas and Millenium drug cartels.