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Governor Rodriguez Says Banxico Could Intervene If Volatility Becomes Extreme

MEXICO
  • Banxico Governor Rodriduez said yesterday that the central bank could intervene to restore order if FX volatility ever becomes extreme. She said that possible intervention mechanisms include a $30bn FX coverage program that could be deployed by the exchange commission, adding that policymakers aren’t trying to defend a specific level for the currency. Rodriguez also said that the Bank should evaluate with caution the inflationary impact of recent MXN volatility ahead of the June 27 MPC meeting, saying that these effects may not be evident in the short term.
  • USDMXN is trading in a tighter range today around 18.70, having made a couple attempts yesterday at the psychological 19.00 mark. Above that level, a cluster of medium-term highs around 19.20 represent significant peso support.
  • Today, the US ambassador to Mexico Ken Salazar will hold a press conference at 1800BST(1300ET), following a visit by a US delegation to meet with President-elect Claudia Sheinbaum earlier in the week. No macro data are due, with attention turning to April retail sales next week.

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