Foreigners tripled their purchases of Mexican debt last year, investing $24 billion as low interest rates in wealthy nations made Mexican securities more attractive, central bank data showed on Friday. The torrent of cash helped lift Mexico's peso currency 6 percent against the US dollar last year and so far this year it has strengthened a further 2 percent.
At the same time, worries that money flows could quickly reverse have led Mexico to boost international reserves significantly, almost matching the inward flow of capital. Mexican policymakers are especially eyeing the day the US Federal Reserve eventually raises interest rates. Mexico boosted international reserves last year by $23 billion, to $114 billion, according to data in the central bank's fourth-quarter balance of payments report. "The objective is to have something that can absorb the shock," Finance Minister Ernesto Cordero said this week.
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