| | |  Business News | October 2008 
Mexican Peso has Biggest Pct Drop in Over a Decade
 Michael O'Boyle & Lizbeth Salazar - Reuters
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Mexico City - Mexico's peso plunged on Monday in its biggest one-day drop in over a decade and stocks sank on fears the global economy was lurching into recession despite efforts to halt worldwide financial panic.
The peso MEX01 fell 6.43 percent to 11.98 per dollar, its weakest level against the dollar since the government ended currency controls in late 1994.
It was also the peso's biggest one-day percentage slide since March 1995, when Mexico's economy cratered in a meltdown known as the Tequila Crisis.
Despite the steep slide, analysts doubted the country's central bank would intervene in markets.
The IPC stock index .MXX sank 5.4 percent to 21,749.13 points, its lowest level in two years. Trading in at least six companies, including cement giant Cemex, was briefly suspended after sharp falls in share prices.
Despite the action by the U.S. Congress last week to approve a $700 billion bailout for financial firms, many analysts fear the rescue package will not stop a recession in the United States, Mexico's main trading partner.
"What is very uncertain is to see how the international problem will end or how it can be resolved," said Mario Correa, an economist at Scotiabank in Mexico City.
Worries about the credit crisis and its widening economic fallout have knocked Mexico's peso down 17.6 percent from an August peak and stocks are down more than 32 percent from an April high.
Mexico's benchmark 10-year government peso bond fell 0.865 of a point in price to bid 95.22, pushing its yield up 14 basis points to 8.50 percent.
In stock trading, top retailer Wal-Mart de Mexico (WALMEXV.MX) plunged 10.85 percent to 29 pesos. The company is expected to post its first decline in quarterly net profit in five years on Tuesday when it releases its July-Sept financial results.
Shares of Cemex (CMXCPO.MX), the world's No. 3 cement maker, lost 11.76 percent to 13.80 pesos, recovering slightly after trading in the shares was suspended for five minutes in the afternoon. Cemex shares in New York (CX.N) dove 13.46 percent to $11.77.
Shares of miner Grupo Mexico (GMEXICOB.MX) lost 11.31 percent to 8.70 pesos as prices for copper futures sank in New York.
(Editing by Leslie Adler) |
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