International Business

MEXICAN STOCKS

* Mexican stocks closed lower for a third-straight session in light trading amid concern over a declining peso and rising interest rates. The peso was driven to record lows against the dollar as investors, worried about the country’s financial stability, ignored a sharp rise in interest rates.

* The government’s effort to shore up the battered currency by offering investors more attractive rates backfired due to growing mistrust among investors about the Mexican government’s ability to drag the economy out of a deep recession. “It could be that higher interest rates caused more capital flight because some investors do not want to be in a high interest rate economy,” said David Malpass, an economist at Bear Stearns. “The bottom line is that Mexico cannot both defend the currency and promote economic growth,” consulting firm I.D.E.A. in New York said in a statement.

The Bolsa Index

Wednesday closes: 2,234.47

Sources: Bloomberg Business News, Dow Jones