Banxico’s Garcia on the intervention unwind and FX hedging
The Bank of Mexico’s operations head explains why it’s removing its forwards hedges, and how it manages carry costs
When the inflow of dollars from Mexico’s national oil company started slowing in the mid 2010s, the Bank of Mexico (Banxico) had to be more cautious about its use of international reserves. So it looked to the USD/Mexican peso FX forwards market as an alternative way to intervene to stabilise the currency when required, but without draining its reserves.
On August 31, Banxico announced it would be winding down its short USD/MXN forwards positions that it had built up during its 2017 and 2020
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@fx-markets.com or view our subscription options here: https://subscriptions.fx-markets.com
You are currently unable to print this content. Please contact info@fx-markets.com to find out more.
You are currently unable to copy this content. Please contact info@fx-markets.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@fx-markets.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@fx-markets.com
More on Infrastructure
LSEG readies hard matching on forwards venue
Forwards Matching eyes Q4 start for new function that enables faster credit checks
Integral launches on-chain crypto prime brokerage service
The model leverages stablecoins to exchange margin and settle trades on blockchain
Crypto’s predictable path from central books to OTC discretion
Demand for bilateral trading, like OTC FX market structure, is fuelling crypto’s institutional take-up, finds BridgePort
CME boosts FX access via new vendor partnerships
Tie-ups with Trading Technologies and Integral to bring new liquidity into EBS and Spot+ venues
Standard Chartered launches spot crypto market-making
Bitcoin and ethereum to trade off the bank’s FX desk, but questions remain on capital treatment
LMAX: stablecoin bill sets stage for FX and crypto convergence
CEO David Mercer on what the Genius Act means for markets, and where the venue’s FX business goes next
Deutsche Bank takes AutobahnFX on the open road
Proprietary trading platform sets out new workflow-based approach to collaborating with venues
Eyes on automation as FX options volumes surge
Dealers and trading platforms are gradually making progress to electronify FX options pricing and workflows
