The Banco de Mexico said it sold $258 million at auction in the domestic market in an effort to reduce volatility after the exchange rate for the peso went over 14 per U.S. dollar due to the uncertainty created by the situation in Greece.
A total of $400 million was offered on Wednesday morning, with $258 million being auctioned off at a "pondered price" of 14.01 pesos per dollar, the central bank said.
Since 2008, the central bank has had an auction mechanism in place totaling $400 million that is activated whenever the Mexican peso drops by 2 percent relative to the exchange rate the previous day.
Dollar auctions were reduced to $300 million in March 2009 and to $250 million in May of that year. They were suspended in April 2010 and resumed last November.
The central bank also implemented an options system for commercial banks to sell dollars to it in an effort to reduce dollar liquidity in the market.
The goal is to reduce uncertainty about lack of liquidity in the market that could cause sharp drops in the value of the peso, preventing macroeconomic contagion from spreading. EFE