Videgaray, right, in Davos. Videgaray, right, in Davos.

Peso hits new low of 18.8 against dollar

Finance Secretary says the currency is "clearly undervalued"

The Mexican peso dropped to a new record low against the dollar yesterday and did the same again today.

The peso slid to 18.8 to the dollar today after dropping to 18.71 yesterday.

Some banks were selling the U.S. currency for more than 19 pesos today.

The peso has lost nearly 8% in the past three weeks. Last year it dropped by nearly 17% against the dollar.

Finance Secretary Luis Videgaray told El Financiero during an interview today that the peso is “clearly undervalued” and that its decline in value is the result of overreaction by the market.

But when markets calm down, he said, the peso will regain strength.

Ongoing dollar auctions to support the currency will continue, said the Finance Secretary, who is attending the World Economic Forum in Davos, Switzerland, but there will be no further budget cuts.

He said there was “definitely” no risk of a financial crisis.

Source: El Financiero (sp)

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