Listen to this article
A rare thing indeed: a top Trump policymaker is helping boost the Mexican peso.
Newly-appointed US commerce secretary Wilbur Ross has been on CNBC today, insisting the White House administration would think of ways to work with Mexican authorities to stabilise the currency.
The peso is taking heed, climbing 2 per cent against the dollar at publication time and heading for its best daily jump since January.
Recalling the Mexican “Tequila crisis” of 1994, Mr Ross told CNBC the then US Treasury had “put in place lines of credit between the central banks” to help stem currency outflows.
“We need to think of a mechanism to make the dollar-peso exchange rate more stable”, said Mr Ross, a billionaire investor, who insisted such matters were outside his immediate remit as commerce secretary and a subject for the US Treasury.
He added that a successful revamp the North America Free Trade Agreement – a key aim of the new administration – would help support the peso rather than weaken it.
The peso hit a record low in the aftermath of Mr Trump’s election on fears that his protectionist rhetoric and promises to build a border wall with the country would hit the Mexican economy.
Despite Mr Ross’s comments, Agustín Carstens, Mexico’s central bank governor, told a news conference earlier this week the bank was “categorically” denying that it could seek a swap line from the Federal Reserve in case of liquidity problems.
The peso has been strengthening this month after the country’s central bank launched a $20bn foreign exchange hedging programme which will start with an auction next Monday for up to $1bn.
Mr Carstens has also flatly rejected any notion of a managed exchange rate, saying the Banxico’s goal was “not to pursue an exchange rate level. We have a floating rate regime … the most important thing is not a foreign exchange goal”.
Get alerts on Mexico when a new story is published