Mexican Peso Falls to Nearly 600 to Dollar

The value of the Mexican peso plunged again Wednesday, tumbling to record lows approaching 600 pesos to the U.S. dollar on the free market.

Several private exchange houses here offered 585 pesos to customers wanting to sell a dollar on the free market and demanded as many as 595 pesos to buy one.

The buy rate briefly topped the 600 mark at one private exchange house in the morning before strengthening a bit at midday. By early afternoon, the exchange house had stopped selling dollars altogether.

Other exchange companies posted buy-sell rates of 573-583.

It was not immediately clear what was causing the slide. There have been widespread rumors of imminent changes in government economic policy.

The peso slipped 14 points on Tuesday at private exchange houses in what the financial daily El Financiero called “a new attack by speculators.”

New Measures

In El Paso, along the U.S.-Mexico border, the rate at commercial banks shot up to 575-615 by midday Wednesday after posting 550-563 on Tuesday.

The free-market rate is used in tourism and for most border and private transactions.

A second rate, which is regulated by the government, was about 542 pesos to the dollar. That rate is set daily by representatives of commercial banks and the Bank of Mexico, the nation’s central bank. It is used in about 80% of commercial transactions.

The latest jolt to the peso comes amid reports that the government is poised to unveil a series of tough measures to revive the stalling economy.

Government officials have repeatedly denied that any such program, which has been dubbed the Aztec Plan, is in the works to freeze wages and prices, lower interest rates and create a new currency pegged to the dollar. But the rumors persist.

Talks With IMF Slow

Some local newspapers also have reported that the administration of President Miguel de la Madrid is considering a temporary suspension of payments on the nation’s foreign debt of $97.6 billion.

Government officials also have denied those accounts, although they acknowledge that talks with the International Monetary Fund for a new financial aid package have been slow.

The government wants fresh loans from international organizations and bankers to help with its financial squeeze, which has been caused partly by the collapse of world oil prices.

During economic turmoil, jittery investors often exchange their own, weaker currency for stronger currencies such as the dollar. This has happened to the Mexican currency in the past.

The peso has weakened sharply in recent years. In February, 1982, it was 26 to the dollar. It was 445 to the dollar at the start of this year.