The governor of Mexico’s central bank (Banxico), Agustin Carstens, has taken to the pages of one of this country’s leading newspapers to moderate fears that a weakening peso will have a negative effect on the domestic economy.
Penning an editorial in Mexico City daily Reforma, Carstens pointed out that even though the peso has lost almost 12 percent of its value against the dollar so far this year, inflation has remained steady, slowing to 2.7 percent in July – the lowest rate since 1968.
The peso fell to 16.83 to the dollar at Thursday’s close, another historic low but not a large enough drop from the day before to trigger the central bank to sell an additional US$200 million. To prop up the peso the Banco de Mexico is off-loading US$200 million a day, plus an additional US$200 million when the peso is one percent weaker than the previous session.
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