Mexico Peso gains value for the first time in months as the Banco de Mexico has gone from total transparency to the exact opposite. By keeping traders guessing as to how many peso’s Banco de Mexico is buying from banks a day, it is moving away from the predictable set-auction system using the uncertainty to lower the speculation against the peso. The intervention by the government into the market system is in response to the global recession. Mexico itself has been deeply affected by the recession in the US as exports are cut. Right now it is 13.8 peso’s to one dollar. Economists are estimating that it can rise to 13.2 peso’s to one dollar by the end of the year. “We decided to intervene when it became clear there were elements in the market trying to destabilize the peso to make a profit,” Carstens said at a Mexican homebuilding conference in New York. “We reserve the right to intervene when the market situation demands intervention.” This entire market situation, in Mexico and abroad, reflect that entirety of globalization and the free market identity that the world has adopted. It also deals with each individual nation trying to stay afloat in such a dire world economy.
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