Following a year in which repeated political turmoil sapped investor confidence in Mexico, putting pressure on the peso …. The resulting collapse of the peso left Mexico with $40 billion to $50 billion in external debt (much of it dollar …-indexed) coming due in the near term and almost no foreign exchange reserves. Faced with the prospect that Mexico would either default …

floating regime. Some even argued that it was d‚j... vu' all over again, and that the Bank of Mexico was manipulating monetary …-97 the Bank of Mexico followed some sort of feedback rule from the exchange rate to monetary policy. Our answer to this …