MercoPress. South Atlantic News Agency

Mexico injected 13 billion USD in 2 weeks to support the Peso

The Mexican peso ended trading on Friday at 13.70 to the US dollar after having fallen to a record 14.50. The Mexican central bank supported the currency with 1.1 billion US dollars.

The Deputy governor of the Bank of Mexico (central bank) Everardo Elizondo revealed that between October 8 and 23 the bank had intervened in the market pumping 13 billion US dollars to prop the local currency. Since last August 4, the Mexican peso has depreciated 39% against the US dollar. Elizonod warned that the increase in the value of the US dollar in Mexico could have an impact on inflation, on real income and further pressures on the stability of the Mexican financial system. However the president of Mexico Business Council, CCE, although praising the performance of the central bank said that the risk of inflation was contained. "The intervention of Banxico (Bank of Mexico) to control the value of the peso against the US dollar has been adequate", said Armando Paredes, CCE president. "It's essential for Mexican corporations to have US dollar liquidity", said Paredes addressing the Mexican Foreign Trade, Investment and Technology Council. But he warned that the exchange rate will have an impact on food "and the full cost can't be transferred". He forecasted that in a few weeks financial markets will begin to loose volatility and the US dollar "should stabilize in the range of 11.50 to 12.50 pesos".