Weaker Mexican Peso Inevitable After Trump Win

23 ноября 2016, 22:08
Oleh Yemeliukov

The Bank of Mexico says a weaker peso in the face of events such as Donald Trump's election win is "natural and necessary" since the exchange rate is the most efficient shock absorber. "Intervention may at some point help to reduce volatility, but right now the problem isn't about mitigating volatility but rather confronting a deep shock," Gov. Agustin Carstens says in explaining the exchange commission's decision not to sell dollars to buoy the currency. The peso recently traded in Mexico City at 20.7340 to the US dollar versus 20.5710 Tuesday. The central bank raised interest rates Thursday, and today cut its 2017 growth forecast by half a percentage point to 1.5%-2.5%.

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