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USDMXN Spiking As Banxico Reduces Hedge Program

MEXICO
  • The FX hedging program was initially installed to promote a more orderly FX market in Feb 2017, at which Banxico placed $5.5bln via various auctions. During COVID in March 2020 additional auctions were announced of $1.99bln to total the program at $7.5bln, with terms of one to twelve months.
  • Banxico now deem liquidity to be 'adequate' meaning the Commission have instructed Banxico to reduce the amount of the FX hedging in force gradually, seeking in all time to maintain the orderly operation of the exchange market.
  • USDMXN spiking sharply to print 17.10 on the latest headlines before settling back below the 17.00 mark for now.
  • The full release (Spanish) is here: https://www.banxico.org.mx/canales/%7B92E3E38B-E9B...

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