The volatility mollification strategy has been dubbed the biggest change in Mexican central banking since the "Tequila Crisis", in which a devaluation of the peso led to a banking crisis.
For those unfamiliar with the "Tequila Crisis" the devaluation occurred in December 1994, which caused half the country's foreign exchange reserves to leave the country.
The peso's fall has been largely due to threats to impose trade barriers on Mexican goods headed to the United States by the Trump administration, which has also sparked currency volatility. It has been dubbed by the media as the "Trump Slump".
Mexico's foreign exchange commission announced the volatility was "not consistent with the country's economic fundamentals".
Mexico has responded to the fall by hiking interest rates over the course of a year. In January 2017, the central bank also reportedly sold around a billion USD to support the peso.
For those unfamiliar with the "Tequila Crisis" the devaluation occurred in December 1994, which caused half the country's foreign exchange reserves to leave the country.
The peso's fall has been largely due to threats to impose trade barriers on Mexican goods headed to the United States by the Trump administration, which has also sparked currency volatility. It has been dubbed by the media as the "Trump Slump".
Mexico's foreign exchange commission announced the volatility was "not consistent with the country's economic fundamentals".
Mexico has responded to the fall by hiking interest rates over the course of a year. In January 2017, the central bank also reportedly sold around a billion USD to support the peso.
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