Foreign Exchange Market Mexico

The foreign exchange market Mexico typically handles the Mexican currency market,
where the buyers and sellers of different countries trade the Mexican currency Peso with
other

currencies

of

the

world.

The major players in the Mexico foreign exchange market are the Mexican government,
the central bank - Bank of Mexico, all major commercial banks in Mexico and other leading
financial corporations. The foreign exchange policies in Mexico are set and regulated by the
Bank of Mexico and Ministry of Finance. The rate of exchange of Peso with other currencies
largely depends on the money value of Peso and the corresponding traded currency. The
more the currency is traded in the foreign exchange market and the less it is in supply, the
more the value of that particular currency in the foreign exchange market.
The Mexican currency Peso has universal acceptance and apart from Mexico, the Peso is
also used as a medium of exchange in North America, China, Pacific Islands and South
East Asia. Due to its universal acceptance, the Mexican Peso is a largely traded currency in
the

foreign

exchange

market

all

over

Currency

Exchange Rate

US$

11.0925

Pound Sterling

22.155

Canadian Dollar

10.8389

Australian Dollar

9.2766

Euro

15.3842

New Zealand Dollar

7.8745

the

world.

Debt markets play an important role in any economy as they provide economic agents with alternative
options to banking for allocating their savings efficiently. From a central bank perspective the
development of domestic debt markets is of particular relevance, as they enable the use of short-term
interest rates to convey monetary policy signals across the whole maturity spectrum.
In Mexico, the central bank has participated actively in developing domestic debt markets

Mexican bonds issued by the federal

government in international capital markets. Each
issuance has specific characteristics and offer

considerable liquidity and are preferred by foreign

investors.
Weighted averaged coupon of approximately 5.82%
Weighted average years to maturity is
approximately 17 years
CETES are peso-denominated treasury bills that were for a long time
the leading instruments in the Mexican money market. They are still
a
significant reference, with their main advantages being flexibility,
liquidity and yield.
As of September 2012, there are currently MXN 608.2 billion (US$ 47 billion)
CETES outstanding
Weighted average years to maturity is approximately 0.3 years, ranging from
2012 to 2013

Bonos are peso-denominated fixed-interest federal government

development bonds that are issued and placed for periods of more
than one
year and pay fixed-rate interest every six months.
As of September 2012, there are currently MXN 1,631.1 billion (US$ 125 billion)
Bonos outstanding
Weighted average fixed coupon of approximately 8.0%
Weighted average years to maturity is approximately 8.5 years,

Udibonos are peso-denominated inflation-linked securities issued by

the Mexican Government. The bonds are redeemed at face value at
maturity, though face value is adjusted for changes in the Mexican
Consumer Price Index.
As of September 2012, there are currently MXN 677.3 billion (US$ 52 billion,
includes inflation adjustments) Udibonos outstanding
Weighted average fixed coupon of approximately 4.09% (plus inflation)
Weighted average years to maturity is approximately 12 years, ranging from
2012 to 2040
Key characteristics: inflation-linked nature makes it ideal for insurance
companies and pension funds as it ensures savings growth in real terms, seasonal
nominal returns due to CPI fluctuations.