Tuesday, October 14, 2008

Sinking the Peso

Evidently, four firms were primary among those responsible for the steep decline in the peso over the past couple of weeks. According to the article here, the companies (which include giants Comercial Mexicana and Cemex) agreed to a set exchange rate in the derivatives market, but the appreciation of the dollar obliged them to pull money out of the peso to cover their debts. The rapid exodus sank the peso.

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