Peso Strong Performance and a Historic First for MexicoBy Peter Appleby | Thu, 09/17/2020 - 17:21
Though the pandemic remains the dominating factor of the Mexican and global economy, there are a few reasons to be cheerful. Firstly, the peso’s performance has been such that since the end of June it has been the top performer of the 140 currencies that Bloomberg tracks. Moreover, Mexico’s first sustainable sovereign bond has been hailed as a success by the UN with demand outstripping supply by five when the bond was issued. Still, COVID-19 problems remain. To ensure a safe level of liquidity, Banxico has extended its help to financial intuitions in Mexico and injected a further US$2 billion in support.
All this and more in The Week in Finance!
Peso Keeps Rising
The Mexican peso stood at MX$21.1670 per US dollar on Monday morning following positive market movements after AstraZeneca confirmed its COVID-19 vaccine tests would resume and Pfizer said it would be extending its trial to 44,000 participants.
The performance meant that the peso had gained 10 percent this quarter and stood top among 140 currencies tracked by Bloomberg for gains since the end of June. According to Pantheon Macroeconomics, industrial metrics were also offering positive signs as production rose by 6.9 percent.
Historic First UN Sovereign Bond for Mexico
Mexico launched the first ever sovereign bond intended to meet the UN’s sustainable development goals this week, in what the UN described as a “historic” moment.
Deputy Finance Minister Gabriel Yorio published a video on Twitter detailing the process to issue the bond, which raised a reported US$889.73 million and was oversubscribed by five times.
“Today, I want to tell you that we have finished issuing the first sustainable bond in the world that is connected to the UN’s sustainable development goals. These objectives aim to acknowledge the policies that countries have to reduce inequality, promote financial inclusion and reduce the gender gap,” Yorio said.
Banxico Extends Liquidity Help to Financial Institutions
Baxico has declared that it will extend measures intended to provide liquidity in the financial market until February 2021, as COVID-19 continues to bite and its effects remain in the Mexican economy.
According to El Economista, Banxico’s US$31 billion support package for financial institutions that was released in April this year will have a further US$2.386 billion added to it, so institutions do not need to sell securities in a highly volatile market environment.