/arc-anglerfish-arc2-prod-infobae.s3.amazonaws.com/public/6AW7FAKFKJA4ZAX45FGIZG3WE4.jpg?fit=%2C&ssl=1 "The dollar surpassed 25 pesos in banks, a new all-time high; while the Mexican Stock Exchange fell 2.49%")
The Mexican peso registered a new all-time low when trading at more than 25 per dollar. However, according to the Banco de México (Banxico) reported that the national currency was quoted at 24.24 pesos per dollar, a recovery of 18 cents compared to Thursday’s close when it was 24.42 units per greenback.
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The dollar closed this Friday for the first time at 25.11 pesos for sale at bank windows, amid financial turmoil due to the coronavirus pandemic, according to Citibanamex data,
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In the Banxico exchange rate, the recovery of the Mexican currency was due to the surprise and early decision of this autonomous body to reduce its reference interest rate by half a percentage point, to locate it at 6.5 percent.
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The decision was made after acknowledging that the circumstances created by the covid-19 pandemic “affect growth and inflation forecasts for the national economy.”
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According to analysts, with a lower interest rate, the central bank seeks to generate stimuli to economic activity, through a reduction in the cost of financing for companies and individuals.
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“The effects on economic activity stemming from the pandemic, in an attempt to further weaken the global economy, lead to a deterioration in growth prospects,” they explained.
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For his part, Alberto Ramos, chief economist for Latin America at Goldman Sachs, explained that: “in our assessment, in light of recent notable internal and external macro and financial developments – sharp tightening of financial conditions, severe internal shock and negative external to activity – the 50 basis point cut was a disappointing move, particularly for an extraordinary decision between meetings and given the starting point of a restrictive policy rate level of 7.0 percent. ”
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The Banco de México monetary policy meeting was scheduled for March 26 and was brought forward to this Friday due to the volatility that has prevailed in the financial markets and the decisions of central banks in other countries to reduce their reference rates to face to the economic impact of the measures taken by governments of various parts of the world to face the coronavirus pandemic.
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For its part, the Mexican Stock Exchange lost 2.49% to locate its main indicator S & P / BMV IPC at 34,269.51 units, amid a day of high volatility in the face of fears generated by the economic impact that the coronavirus pandemic will cause.
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The Price and Quotations Index accumulated a weekly loss of 10.02%. The worst previous weekly loss for this indicator was recorded in the same period that ended on October 24, 2008, when it fell 16.41 percent.
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On the other hand, at the close of operations this Friday, the Dow Jones industrial index stood at 19,173.98 units to accumulate a weekly loss of 17.3 percent, after falling 4.11.64 points.
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This percentage drop that the Dow Jones had in the week only compares with the 18.15% decrease registered at the end of the week of October 17, 2008, when the financial crisis that led to the recession in the world economy broke out.
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The Nasdaq accumulated a weekly drop of 12.46%, to settle at 6,879.52 points. Meanwhile, the S & P500 ended the week at 2,304.92 units, to accumulate a loss of 14.98%.
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Finally, according to the Petróleos Mexicanos portal, the Mexican crude oil mix is trading at $ 17.70 per barrel, against $ 14.54 per barrel.
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