Mexican central bank will hold auction in dollars.
To order the liquidity and operation conditions of the foreign exchange market, the Bank of Mexico (Banxico) will auction loans on April 6 for five billion dollars with a term of 84 days.
Under this mechanism, the Mexican central bank will auction the resources through the swap line mechanism established on March 19 for a maximum amount of 60 billion dollars.
The five billion dollars in credits will be exchanged by Banxico with the United States Federal Reserve (Fed) and will not be included as debt.
By auctioning credits in dollars, the increase in domestic demand for foreign currency is prevented from raising the price of the dollar and the increase in exchange costs is slowed.
The resources involved in this operation come from the Fed, which takes pesos and grants dollars at the current exchange rate, with the commitment that Banxico return the dollars in a certain time and recover pesos.
The “swap” mechanism for up to 60 billion dollars was activated with the aim of supporting the provision of liquidity in United States dollars in the national interbank market.
In a statement, the Foreign Exchange Commission, which is the body in charge of foreign exchange policy in the country, expressed that the anchoring of the value of the national currency will continue to be pursued mainly through the preservation of solid economic fundamentals.
The Commission announced that it will continue evaluating the operating conditions in the foreign exchange market and, if necessary, will adopt additional actions.
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