UPDATE 1-Mexico to start bond buybacks on Dec 1

MEXICO CITY, Nov 7 (Reuters) - Mexico will begin buying back long-term bonds on Dec. 1 as part of a previously announced program to help the country's financial system weather the global credit crisis, the finance ministry and central bank said on Friday.

The government said last month it would buy back up to 40 billion pesos in 10- to 30- year peso and inflation-indexed debt to boost liquidity in local debt markets.

Authorities will also hold interest rate swap auctions twice weekly between Nov. 14 and Nov. 28, the ministry and bank said in a joint statement.

The 50 billion peso swap program, also announced last month when Mexican financial markets were reeling from a global sell-off of risky assets, will allow holders of long-term fixed rate bonds to swap their positions for short-term variable rate bonds.

The central bank said on Friday it will use Mexico's benchmark TIIE interbank lending rate MXTIIE1MD=RR as a reference for the variable-rate end of these swaps. (Reporting by Jason Lange; Editing by Dan Grebler)