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Agustín Carstens, Mexico’s central bank governor, told a news conference the bank was “categorically” denying that it could seek a swap line from the Federal Reserve in case of liquidity problems, saying the bank had “never even thought of asking” for such a thing.

His comment came after Bloomberg earlier reported sources saying it was considering seeking such a tool from the Fed in case of volatility in its currency. “I can say clearly and unequivocally that we are not in the process of asking for any credit line from any authority,” he said.

The peso has strengthened to around 20 per dollar, in part because of the announcement of a $20bn foreign exchange hedging programme by Banxico, which will start with an auction next Monday for up to $1bn. The peso’s recent stability contrasts with its collapse immediately after the US election, in part because the peso is traded round the clock and widely used to hedge emerging market risk.

Mr Carstens, who met Fed chair Janet Yellen and Treasury Secretary Steve Mnuchin in Washington this week, said Banxico was “satisfied” with its level of international reserves – some $175bn – plus a flexible credit line from the IMF of a further $86bn. “I’d say we feel satisfied with the resources we have at our disposal,” he said.

Mr Carstens had been expected to leave the governorship of Banxico in July ahead of his new role as head of the Bank for International Settlements. However, after a request from President Enrique Peña Nieto, and a desire to show there would be no “disorderly transition” given the uncertainty and potential volatility about trade and US bilateral relations ahead, he is staying on until November.

In addition to its usual reminder to the government to maintain fiscal consolidation – a nice way of expressing concern over public debt levels that have risen sharply – Banxico added another recommendation in its report: it urged the government to “continue increasing our foreign competitiveness and boost the growth potential of the internal market”. Both actions are seen as important insurance policies in case of the collapse of Nafta.

Mexico has already identified Brazil, Argentina and some members of the Trans-Pacific Partnership, which Mr Trump has pulled out of, for closer bilateral ties and as a potential substitute source of key imports like corn. Banxico said Mexico needed to diversify the market for its exports – the US is currently the destination for more than 80 per cent of foreign sales.

The bank also said it was vital to strengthen Mexico’s rule of law and legal security to provide a more favourable background for growth, something it said “has become more relevant in the current environment”.

Copyright The Financial Times Limited 2017. All rights reserved.
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