He weight fell this Monday for fear of a recession and bad credit ratings, while the Mexican Stock Exchange (BMV) won.
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He Mexican peso depreciated today plagued by fears that the rapid spread of the coronavirus It may lead to a deep global recession, as well as a greater perception of risk on Latin America’s second economy and its committed oil industry.
Also pressured by a collapse in international oil prices, the local currency was trading at 23.8250 per dollar, down 2.25% from close, compared to 23,3010 from Reuters’ benchmark price on Friday.
Earlier it fell more than 5.2% to 24.55 units.
The peso, which fell to its record low of 25.4440 units last week, recovered part of its losses after the Foreign Exchange Commission announced the first auction of credit in dollars for up to 5 billion dollars as part of a series of measures to provide liquidity to the local interbank market.
The auction will be on Wednesday and will have a term of 84 days, the Commission said in a statement, specifying that it will be carried out by the central bank through the use of the “swap” line with the United States Federal Reserve.
Fear has grown in financial markets that the stagnation of economic activity could last for months because of the virus, which has infected 720,000 people and killed almost 34,000 around the world. Until Sunday, Mexico had almost 1,000 infected.
Meanwhile, analysts said the downgrade by the S&P agency to Mexico’s credit rating and that of state oil company Pemex announced on Thursday continued to put pressure on the local currency, as it did at the end of last week.
“There is a greater perception of risk with respect to Mexico,” said Gabriela Siller, director of economic analysis at Banco Base. “The risk remains that another agency will cut Pemex’s rating, which could generate capital outflows from the country and additional pressures to the exchange rate rise,” he added.
The benchmark oil company Brent, meanwhile, plunged to its lowest level in nearly 18 years on Monday, while the contract in the United States pierced the $ 20 barrier due to fears that the worldwide quarantines due to the coronavirus will last for months. and demand plummets further.
In the stock market, the Mexican stock market won in an environment of opportunity purchases after recent sharp falls.
Following the behavior of its peers on Wall Street, the benchmark local stock index S & P / BMV IPC advanced 1.18% to 34,199.97 points. The plaza fell 5.34% on Friday and scored its third consecutive weekly drop of 1.37%. In the year it accumulates a decrease of 21.5%.
In the debt market, the yield on the 10-year bond rose 23 basis points to 7.38%.
With information from Reuters.