UPDATE 2-Mexico's Carstens sees no peso attack, as bets recede on rate hike
(Adds Carstens comment on local radio)
MEXICO CITY May 25 (Reuters) - Mexico's peso is not seeing a new speculative attack despite its recent slump, Central Bank Governor Agustin Carstens said on Wednesday, prompting investors to cut back bets on an aggressive Mexican interest rate hike.
A tumble in the peso in May has stoked expectations that Mexico could raise interest rates next month in a bid to defend the currency.
But Carstens said the peso's depreciation had not been driven by any specific bet against the peso, which has weakened along with other emerging market currencies this month.
"We certainly are not seeing a speculative attack," Carstens told a conference in Mexico City about the central bank's quarterly inflation report.
His comments fed expectations that the central bank was not close to intervening in currency markets anytime soon.
Yields on Mexican interest rate swaps fell after Carstens' comments, as investors dialed back expectations that the central bank would hike its benchmark interest rate at the next meeting in late June.
Mexico's peso has slumped about 7 percent this month, the second-worst performer among the world's 36 most-traded currencies, behind the South African rand.
A sharp drop in Mexico's peso pushed the central bank in February to intervene directly in currency markets for the first time since 2009 and to raise interest rates unexpectedly after an unannounced meeting. Continuación...