Mexico Peso Falls Near Record Low Amid U.S. Recession Concerns

By Andrea Jaramillo

Feb. 25 (Bloomberg) -- Mexico’s peso declined amid concern a deepening U.S. recession will further erode demand for Mexican exports.

The peso dropped 0.3 percent to 14.8720 per U.S. dollar at 9:08 a.m. New York time, from 14.8275 yesterday. The currency, which touched a record low of 14.9855 per dollar on Feb. 20, is down 32 percent in the past six months, the biggest decline among major currencies. Banco de Mexico has spent more than $18 billion of foreign reserves since October to stem the decline.

The yield on the government’s benchmark 10 percent bonds due in 2024 rose one basis point, or 0.01 percentage point, to 8.91 percent. The price on the securities fell 0.1 centavo to 109.17 centavos per peso, according to Banco Santander SA.

Yields on the country’s bonds surged to a two-month high on Feb. 23 after the central bank cut the benchmark rate by a quarter-point to 7.5 percent, less than the median half-point reduction forecast by economists in a Bloomberg survey.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net