Mexican Peso Rises After Carstens Predicts Easing Recession

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Mexico’s peso rose the most in more than two weeks after Finance Minister Agustin Carstens said the nation’s slump will ease in the coming two quarters, bolstering speculation the worst of the recession is over.

The peso gained 1.1 percent to 13.1958 per U.S. dollar at 5 p.m. New York time, from 13.3381 yesterday. Its gain today was the biggest since May 18, when it rose 1.8 percent.

“The good news is that that the worst is over,” said Mario Copca, a currency strategist at Metanalisis SA in Mexico City. “This is what the market is acknowledging.”

Economic activity should get better every month through the end of the year, Carstens said yesterday at a financial conference in Monterrey, Mexico.

The peso has climbed 18 percent since touching a record low of 15.5892 per dollar on March 9, after a government decision to line up a $47 billion credit line with the International Monetary Fund helped shore up confidence.

The central bank sold $100 million to buy pesos at a local auction today. Mexico’s central bank and Finance Ministry said last week that Banco de Mexico will cut in half its daily dollar sale to $50 million starting on June 9 after financial market conditions improved and the peso’s volatility eased.

The country won’t need to tap the IMF facility, the foreign exchange commission said in a statement last week.

The central bank has spent $25.9 billion from its foreign reserves to shore up the peso since it began intervening in the currency market in October.

Yields on the 10 percent bond due December 2024 fell three basis points, or 0.03 percentage point, to 8.22 percent. The bond’s price rose 0.26 centavo to 115.58 centavos per peso, according to Banco Santander SA.

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