Thread: Mexico, U.S. extend $30 billion swap to ease lending

Mexico, U.S. extend $30 billion swap to ease lending

11:16 a.m. February 3, 2009

MEXICO CITY — Mexico's central bank and the U.S. Federal Reserve have agreed to extend the terms of a currency swap through October to boost cash supply at Mexican banks.

The agreement gives Mexico's central bank access to $30 billion, in case it needs additional access to dollars as the global financial crisis tightens lending.

The Bank of Mexico on Tuesday said the swap had been extended from April 30 to Oct. 30.

The Bank of Mexico has auctioned off more than $15 billion in foreign currency reserves to boost its sagging currency.

The peso was trading at a record low of 14.59 to the dollar Tuesday.
Mexico has not yet called in any of the $30 billion.

The U.S. has extended the terms of similar currency swaps to 12 other countries.

http://www3.signonsandiego.com/stories/ ... ndex=47275

Mexico's peso weakens to record low to 14.59

11:27 a.m. February 3, 2009

MEXICO CITY — Mexico's peso has dipped to a new low against the U.S. dollar as recession fears mount in both countries.

The peso slipped 0.7 percent to 14.59 on Tuesday, breaking Monday's 14.57 record.

The peso has lost 45 percent of its value against the dollar since August, even as Mexico's central bank sold more than $15 billion in foreign reserves.

Mexico sends 80 percent of its exports to the U.S., where recession has slashed demand for its goods and reduced work for migrants who send dollars home.

Mexico's economy shrank at a yearly rate of 1 percent last quarter. The central bank cut interest rates for the first time since 2006 to boost growth, but the move also lowered the appeal of peso-bonds.

http://www3.signonsandiego.com/stories/ ... ndex=47277