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MEXICO CITY, Jan 28 (Reuters) - Mexico’s currency commission said on Thursday it will maintain a daily dollar auction program, dashing expectations that authorities could increase intervention efforts to prop up the battered peso.
The currency commission said it would continue to offer up to $400 million a day from Feb. 2 to March 31 whenever the peso sees sharp losses. The program was set to expire this Friday.
The peso pared gains after the announcement, but was still trading 0.65 percent stronger on bets the U.S. Federal Reserve will not aggressively hike interest rates following weak U.S. durable goods orders.
Many analysts had expected Mexico to boost dollar sales to support the Mexican currency, which has shed nearly 7 percent in January and is on track to post its biggest monthly loss against the dollar since May 2012.
Mexico is committed to a freely-floating exchange rate and refrains from using more direct forms of intervention used by other emerging markets, which have seen deep losses on bets higher U.S. interest rates will sap demand for riskier assets.
But the country’s FX commission, made up of officials from the central bank and the finance ministry, began using rules-based auctions in late 2014, when a collapse in global oil prices sent the peso to a record low. (Reporting by Mexico City Newsroom; Editing by Chizu Nomiyama)