February 22, 2017 / 9:05 PM / 6 months ago

Carstens hails FX hedge as Mexico peso strongest since Trump election

Mexican peso and U.S. dollar banknotes are seen in this picture illustration, November 3, 2016.Edgard Garrido

MEXICO CITY (Reuters) - Mexico's peso extended gains to its highest level since the election of U.S. President Donald Trump on Wednesday, a day after the central bank said it would offer up to $20 billion in currency hedges.

In an interview with local news agency Notimex, Mexico's central bank head Agustin Carstens said the stronger peso MXN=D2, which gained 0.6 percent on Wednesday to trade at 19.89 per greenback, reflected confidence in the hedge.

"The measure has been very successful," Carstens said, adding the hedge helps remove volatility from the foreign exchange market.

Mexico's foreign exchange commission said the first auction of the new instruments will be on March 6 for up to $1 billion.

Reporting by Natalie Schachar

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