FALLOUT FROM MEXICO’S FINANCIAL CRISIS : Peso Tumbles Another 12% Against Dollar : Currency: New loss in value comes as concern grows that U.S. package of loan guarantees is in trouble in Congress.

This nation’s already battered financial markets on Monday suffered one of their worst days since Mexico’s economic crisis began nearly six weeks ago, with the peso closing at record lows against the U.S. dollar and the stock market losing 3.3% of its value within the first hour of trading.

Fueled by the political tumult in Washington that threatens President Clinton’s proposed $40-billion package of loan guarantees for Mexico and rumors--denied here Monday--that Mexico’s foreign exchange reserves have dropped to just $2 billion, the Mexican currency lost an additional 12% of its value.

It closed at 6.35 pesos to the dollar, down from 5.72 at Friday’s close. Its previous all-time low of 5.85 was recorded on Jan. 6.

The peso has now lost about half its value in the 40 days since President Ernesto Zedillo’s government announced that massive capital flight and political instability in southern Mexico had drained foreign-exchange reserves and forced it to float the peso against the dollar in December.

As the bitter debate on whether to save Mexico’s beleaguered economy continued on Capitol Hill, Mexico’s stock market, the Bolsa de Valores, continued its frantic, roller-coaster ride. It crashed below a widely accepted support base of 1,900 points, closing at its lowest level in 15 months.

Despite heavy government buying in the afternoon to cut the day’s losses, the Bolsa closed down 58.75 points, or 3%, at 1,898.90. It was the lowest close since Oct. 8, 1993.

In an attempt at damage control, a spokesman for Mexico’s Central Bank strenuously denied as “incorrect” widespread rumors that the nation’s foreign exchange reserves, which stood at $24 billion just a year ago, had fallen to just $2 billion this week.

The spokesman refused to disclose the current reserves, which stood at $5.456 billion early this month when the government last disclosed them to help justify the peso’s radical devaluation.

Herminio Blanco, secretary of commerce and trade, also weighed in to deny the rumors, adding that he could not remember the precise figure of the nation’s reserves, but that it was more than $2 billion and that Mexico’s Central Bank would publish it later today.

Blanco, speaking to reporters in Paris after attending the World Economic Forum in Davos, Switzerland, stressed that he still believes the loan guarantees will pass the U.S. Congress, but that with or without them, his government will not default on its burgeoning foreign debt.

“Our crisis is one of liquidity, not solvency,” he said.

Amid Monday’s wild market gyrations, though, analysts speculated that, to stabilize the peso in the short term, the government will have to tap heavily into the $18-billion credit line made available to Mexico by the United States and Canada when the Mexican economy began to unravel last month.

Zedillo’s financial team already dipped into the fund three weeks ago to help cover the nation’s short-term debt, paying off key government bonds that came due earlier this month.

But more than $28 billion in additional Mexican bonds will come due later this year, and doubts about the government’s ability to pay have pushed interest rates at recent Tesobono auctions to a record 20% and deepened the uncertainty in the nation’s financial markets.

Most dealers said Monday’s large peso and market losses could be blamed, not on rumors, but reality--the continuing bad news from Washington, where deepening doubts about the American credit package’s chance for passage in the Congress led banks and corporations to sell off large quantities of pesos for dollars on Monday morning.

The impact on Mexico’s corporate community--particularly its once-thriving banking and financial sector--already has been devastating.

An analysis published Monday in Mexico City’s prominent economic daily El Financiero showed that the value of the nation’s 15 largest financial groups has fallen 55.8% in dollar terms--or the equivalent of $20.5 billion.