• Mexican central bank props up peso

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    MEXICO CITY: The Mexican central bank propped up the peso on Thursday, intervening in the foreign exchange market after US automaker Ford’s decision to scrap a new factory caused the currency to sink.

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    The central bank did not reveal the amount of dollars it sold in its first such action since Republican Donald Trump won the US presidential election on November 8.

    The bank said in a statement that the move sought to “provide liquidity and mitigate the volatility that has been observed in recent days.”

    It did not rule out taking similar action again.

    After the central bank’s announcement, the Mexican currency traded at 21.60 pesos per dollar, up 0.9 percent from the previous day, according to private bank Citibanamex.

    But it later lost much of the gain, trading at 21.75 pesos per dollar compared with 21.80 on Wednesday, the bank said.

    The peso plunged to record lows after Trump, who takes office on January 20, pledged to upend US trade ties with Mexico and threatened to impose tariffs on companies that ship jobs across the border.

    The currency fell more than three percent since Ford announced on Tuesday the cancellation of a $1.6 billion factory in Mexico — a project that Trump had repeatedly criticized. AFP

    AFP/CC

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