Banco de Mexico announced a new FX hedging program - BBH

Analysts at Brown Brothers Harriman explained that Banco de Mexico announced a new FX hedging program.  

Key Quotes:

"Long story short, this is very much like the swaps program used by Brazil."

"The central bank takes on FX risk but pays out in local currency so there is no drain on FX reserves."

"Any FX losses will be absorbed by Banxico, which has been profitable over the last several years."  

"This was taken very positively by the markets."  

"USD/MXN broke below the key 20.10 level yesterday, but there was no follow-through and the pair is back above 21.0."

"Still, the break should set up a test of the 19.65 area."