March 18, 2020 / 3:44 PM / 11 days ago

UPDATE 1-Mexican peso hits all-time low amid coronavirus fears

(Adds background on currency’s performance)

MEXICO CITY, March 18 (Reuters) - The Mexican peso deepened its fall on Wednesday, hitting a record low at more than 24 units to the dollar amid concerns over the economic impact of the coronavirus outbreak.

The local currency was trading at 23.84 units per dollar, down 3.94%. Shortly before 9 a.m. local time, the currency reached 24.08 units, a new all-time low.

The peso has fallen more than 25.6% since the start of the year. Mexican stocks also suffered on Wednesday, with the nation’s benchmark stock index dipping more than 3%.

As oil prices fell on Wednesday for the third straight session, Banco Base said a lower price increased the risk of a cut to the rating of Mexican state oil company Pemex and the country’s sovereign credit rating.

The dollar rose to a three-year high against major currencies on Wednesday as investors concerned about the coronavirus outbreak embraced the world’s most liquid currency.

Analysts expect the peso’s depreciation to factor into the Mexican central bank’s decisions on monetary policy next week.

Financial group Monex said in a note to investors that the central bank was less likely to continue cutting interest rates given the risk of exacerbating inflation. (Reporting by Miguel Angel Gutierrez; writing by Julia Love; editing by Chizu Nomiyama and Chris Reese)

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