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February 2010 - November 2011. Dollar purchases through the put options mechanism

On February 22, 2010, the Foreign Exchange Commission, made up of officials from the Ministry of Finance and Banco de México, and which is responsible for Mexico's foreign exchange policy, issued a press release announcing the re-introduction of put options auctions that will enable buyers to sell dollars to Banco de México. In this press release, the Foreign Exchange Commission explained that the world financial crisis highlighted the importance of having greater international reserves.

According to circular 8/2010, this mechanism operates as follows:

(a) On the last business day of each month, Banco de México auctions to banks the rights to sell dollars back to the central bank (put options). These rights can be exercised partially or entirely, within the month following the month of the auction. The auction amount is set at USD 600 million per month.

(b) Option holders can sell dollars to the central bank only if the exercise price (the exchange rate computed for the preceding day or Fix) is below the last 20-day moving average prior to the exercise date.

On November 29, 2011, the Foreign Exchange Commission announced (see press release, currently published only in Spanish) that the monthly auctions of put options would be temporarily suspended and that dollar auctions with a minimum price (see USD auctions with a minimum price) would be reactivated until further notice.

See historical information on US Options auctions

See historical exercise of US dollar sale options sold by Banco de México