Mexico: Banxico into the breach once more

09/20/16 Financial Times 

Agustin_Carstens
Carstens

Peso weakness has yet again left Mexican monetary policymakers in an unenviable position. Last Friday, the MXN fell to a record low of 19.77 to the dollar, leading to speculation that Banxico will be forced to intervene in the currency markets … or even into an emergency interest rate hike, similar to the inter-meeting move it made in February.

The currency’s slump — down 12 per cent year-to-date, making it the second-worst performer in developing markets after the Argentine peso — is due to a nasty confluence of factors.

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