The Mexican peso fell to a new record low against the dollar in late trading Friday, a decline dealers attributed to a surge of speculative demand for the U.S. currency.
In Mexico City at around 11:20 a.m. PST, the peso was quoted at 5.775 to the dollar compared with 5.35 late Thursday, a drop of nearly 8 percent in the value of the ailing Mexican currency. The previous low was 5.70 pesos on Dec. 27.
The peso has declined by about one-third against the dollar in the last month, sparking fears in Mexico of soaring inflation as import costs rise and eroding confidence among foreign investors in the country’s financial markets.
It wasn’t immediately clear whether Friday’s plunge reflected a lack of investor confidence in the government’s economic stabilization program, outlined Thursday for U.S. investors.