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MEXICO CITY, Feb 17 (Reuters) - Mexico's central bank is raising its benchmark interest rate by 50 basis points to 3.75 percent following a sharp slide in the local peso, Governor Agustin Carstens said on Wednesday.
Accompanying Carstens, Finance Minister Luis Videgaray said the government was suspending a regular dollar auction program, in favor of a new discretionary intervention program which sources said kicked off shortly before the formal announcement.
Videgaray also said the government will cut spending this year, as it grapples with lower oil revenue and the sharply depreciated peso. (Reporting by Michael O'Boyle)