The central bank is authorised to auction its reserves of US dollars if the peso depreciates by 2% or more against the previous day's close. In this way, the central bank can increase liquidity in the market and smooth volatility in the value of the currency.
In 2009 the central bank put in place a programme of interest-rate swaps for up to Ps50bn (US$3.7bn) to facilitate banks' liability management, enabling them to swap exposure to long-term fixed-rate instruments for short-term variable paper.
In January 2011 the IMF renewed Mexico's precautionary, two-year US$72bn flexible credit line (FCL). The FCL insures against possible volatility in global markets by supporting the country's balance of payments and international reserve position.
Source: Economist Intelligence Unit
Showing posts with label dollars. Show all posts
Showing posts with label dollars. Show all posts
Thursday, June 9, 2011
Lesson in Financial Regulation in Mexico: Part 2
Continued from Lesson in Financial Regulation in Mexico: Part 1.
Since 2007, the government has been gradually easing restrictions on pension fund investments. In February 2010 pension funds were allowed to invest in private equity. Most recently, in March 2011 investment was allowed for the first time in select foreign currencies (US dollars, euros and Japanese yen only).
In March 2011 the Mexican stockmarket (Bolsa Valores Mexicana -- BMV) formed a derivatives order routing partnership with CME Group (the US-based entity created from the merger of the Chicago Mercantile Exchange and the Chicago Board Options Exchange in July 2007). The BMV's derivative products are offered through its subsidiary, the Mexican Derivatives Exchange (Mercado Mexicano de Derivados -- MexDer). The first part of the arrangement, launched in April 2011, granted Mexican investors direct access to CME Group's products through MexDer. The second part, expected to go live in the third quarter of 2011, will allow international investors direct access to MexDer derivatives through CME Group.
Source: Economist Intelligence Unit
Since 2007, the government has been gradually easing restrictions on pension fund investments. In February 2010 pension funds were allowed to invest in private equity. Most recently, in March 2011 investment was allowed for the first time in select foreign currencies (US dollars, euros and Japanese yen only).
In March 2011 the Mexican stockmarket (Bolsa Valores Mexicana -- BMV) formed a derivatives order routing partnership with CME Group (the US-based entity created from the merger of the Chicago Mercantile Exchange and the Chicago Board Options Exchange in July 2007). The BMV's derivative products are offered through its subsidiary, the Mexican Derivatives Exchange (Mercado Mexicano de Derivados -- MexDer). The first part of the arrangement, launched in April 2011, granted Mexican investors direct access to CME Group's products through MexDer. The second part, expected to go live in the third quarter of 2011, will allow international investors direct access to MexDer derivatives through CME Group.
Source: Economist Intelligence Unit
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