Mexico Peso Rises, Stemming Six-Day Rout, on Dollar Sale Plan

By Michael J. Moore

Oct. 9 (Bloomberg) -- Mexico's peso strengthened for the first time in seven days after the central bank dumped the most dollars in the foreign exchange market in a decade yesterday.

The peso rose 1.8 percent to 12.1079 per dollar at 8:43 a.m. New York time. The currency fell as much as 13.8 percent yesterday, its biggest intraday drop since the government abandoned a currency peg in 1994, and touched a record low before the central bank said it would sell dollars.

Banco de Mexico sold $998 million yesterday and said it will offer another $1.5 million today. The central bank also said it will sell $400 million in coming days when the peso weakens more than 2 percent. The bank is tapping into a near-record $84.1 billion of foreign reserves that were built up during a six-year rally in oil, the country's biggest export.

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net