Gabriel Gerzstein, a strategist at BNP Paribas, estimated that opening an episode of dollar sales to “anchor the value of the national currency” could cost about $ 40 billion from the international reserve.
The handling of discretionary dollar auctions, in the context of volatility generated by US protectionist policy, would have to motivate the Exchange Commission to “be much more aggressive and discretionary than in 2015,” he explained.
In August, Banxico used a daily auction mechanism that ended up draining $27 billion from the reserve in six months.
So far that $4 billion has not stemmed the tide of selling with the peso down 3%:
We’re gonna need more intervention.
The iShares MSCI Mexico Capped ETF (NYSE:EWW) was unchanged in premarket trading Monday. Year-to-date, EWW has declined -1.93%, versus a +1.52% rise in the benchmark S&P 500 index during the same period.
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