In order to hit the Mexican peso, Zhongshi did not hesitate to pull Chase Bank, Standard Chartered Bank and others in. He knew that he could not bring down a country's exchange rate system on his own.

You must know that Mexico is one of the largest economies in Central and North America, with a GDP estimated to be more than $300 billion in '94. Mexico had $25 billion in foreign exchange reserves at the time, and in order to cover the current account deficit in international trade, the Mexican government issued a large number of short-term bonds denominated in US dollars, which amounted to $28 billion. On top of that, the total amount of U.S. funds flowing into the Mexican stock market is $75 billion, and none of these figures can be shaken by the current Bell Stone.

But all this is based on the fact that foreign capital will continue to flow into Mexico, and if the inflow of foreign capital stops or slows down, it will cause market risks, and when foreign capital begins to withdraw, the Mexican government's poor foreign exchange reserves will not be able to support it for long.

Therefore, what Zhongshi needs to do now is to let out the wind and sprinkle another salt on the current market's fragile psychology towards the Mexican peso, so that the foreign exchange trading departments of commercial banks can also join the short-selling camp.

It is important to know that commercial banks play a very important role in currency exchange, especially in a market like Mexico, where the capital account is completely open. Although there are many commercial banks in a country, most of the capital is concentrated in the accounts of a few large commercial banks. Although commercial banks such as Chase and Standard Chartered are not super banks in Mexico's banking system, the sell-off of dollars brought by them is enough to make other commercial banks follow suit.

Besides. Among the other fifteen banks that Zhongshi borrowed, some people will naturally find the strangeness in this, and through the transmission between peers, the foreign exchange trading department will quickly judge the situation, and then follow up the entry operation, so that the impact is not half a star.

Although the Mexican government still restricts the access of foreign banks to the Mexican market, there is no obstacle to the flow of capital, which is why Zhongshi Weishenme is able to freely convert the Mexican peso.

On Wednesday, December 14, the Mexican foreign exchange market opened. There are huge sell orders in the market. The amount reached as much as 500 million US dollars, and such a large-scale sell order surprised the commercial banks involved and inquired about the institutions behind it.

A sell order for a large amount like this, if it is not a commercial bank or hedge fund. Kill these forex traders and don't believe it. But here's the problem. If it's a commercial bank. It is likely to be a normal exchange procedure, and although the daily trading volume of the Mexican foreign exchange market is not small, it is rare for a situation similar to the outflow of $500 million on a single day. Even commercial banks interested in taking this sell order will need time to raise capital.

In the case of hedge funds with bad intentions, then the commercial banks that are the counterparties need to think carefully. Because if they rush to eat this sell order, they will end up losing money, because if the Mexican peso depreciates in the future, it means that their dollar capital will shrink significantly.

The traders did not dare to slack off and hurriedly reported the situation to the senior management of the commercial banks. It is rare for small and medium-sized banks to accept such a large sell order, so this sell order stayed in the market for a long time, and finally entered the consideration of several large Mexican commercial banks.

"We don't have a lot of dollar capital in our bank, and if we can't exchange it, then we'd better go to the central bank!" Within the Banco de Crédit de México, a small, high-level and serious meeting is taking place. A middle-aged man with a mustache is quickly reporting on the unexpected situation in the foreign exchange market and giving his opinion.

Crédit México is one of the few large commercial banks in Mexico, after several larger banks, such as the Mexican Development Bank, the Mexican Bank of Foreign Trade and the Mexican Bank of Public Works and Services. This time, a $200 million sell order came to them.

The name of the person who spoke was Juan. Carlos, the vice president in charge of foreign exchange at Crédit de México, reported the situation to the president when a large sell order appeared in the market for the first time, and both of them felt that the matter was too big, so they held a small meeting in a hurry.

"I disagree!" A cold voice suddenly sounded, "Although this level of exchange is very rare, it is not uncommon in the current foreign exchange market. With our current dollar reserves, which are enough to be able to exchange this sell order, Weishenme asks the central bank to pay an extra part of the interest? ”

Opposition came from Doss from the Department of International Investment. Santos, an energetic and enterprising middle-aged man, has made many gains in overseas markets, especially in the United States, since he headed the International Investment Department.

"And we have enough possibilities to rebuy so many dollars in the foreign exchange market, it's not a loss for us at all, and there's a lot of exchange fees, so why not?" Doss. Santos said lightly, but the accusation in his tone could be heard by anyone.

Since the Department of International Investment uses US dollars, it occupies a large amount of capital in the Bank of Crédit de México, and other departments within the department have long been quite complaining about the work of the Ministry of International Investment, especially the foreign exchange department, because the dollar capital of the Department of International Investment has constrained their foreign exchange work, and the struggle between the two departments is particularly fierce. Santos retorted to Juan. Carlos is no surprise.

Although there are currently two very different views on the value of the Mexican peso at the top of the government, Doss. Santos doesn't care whether the peso depreciates or appreciates, and the departments under his jurisdiction invest in dollars and there is no such problem. On the contrary, Juan. Carlos's foreign exchange department is the most worried about the exchange rate, so if he can hit his opponent hard, he will be very happy.

Hear the-for-tat between the two. Managers in other departments kept their mouths shut. Although they are interested in Doss. Santos was also a little dissatisfied with his behavior, but the performance of the people's investment was there, even if they wanted to say something to support Juan. Carlos's words must also have enough confidence.

"The most important point is that if we don't exchange money, then the credit of our bank in the foreign exchange market will plummet, and even tomorrow there will be rumors in the market that our credit bank is on the verge of collapse due to a shortage of funds. If it causes panic among depositors, it will come to run on it in one fell swoop. When the time comes, if we don't go out of business, we will really go out of business. ”

Doss. Santos's words make sense. Sentence by heart, poke Juan. Carlos's soft underbelly. Juan. Carlos though knows Doss. Santos was exaggerating, but he couldn't afford the big hat that led to the bank's collapse. His lips squirmed slightly, trying to say something. But in the end, not a word was spoken.

"Enough!" It's right in Doss. Santos is also ready to press even further. The president of the Bank of Crédit de México, Javi. Bardon interrupted him. "According to your point of view, if the government suddenly announces a devaluation, and we do not replenish the market with the corresponding dollar capital in a timely manner. So what do we do? ”

For the open and secret struggle between these two subordinates, Xavi has always watched it, but he did not stop it, firstly, this is a healthy competition within the country, and secondly, he is also a little unclear about the current peso trend, so he can only take all the factors into account, and he cannot take sides of one side.

Seeing that the meeting was about to run towards the quarrelsome Jiashi, he could only interrupt the secret battle between the two sides and began to seriously consider Doss. Santos's program. In fact, the exchange is imperative, because even if Crédit de México does not carry out the exchange, other Mexican commercial banks will take over the business, and since the Central Bank of Mexico is behind it, and the Mexican government promises free currency convertibility, Xavi still has great hopes for the viability of this business.

However, as the helmsman of a large commercial bank, Harvey has to consider more than just the price difference and handling fees in the exchange business, he must grasp the balance between the liquidity, risk and profitability of the entire bank, because all three are necessary conditions for running a commercial bank well.

500 million US dollars, converted into pesos, is more than 1.7 billion, which has affected the liquidity of the Mexican Credit Bank to a certain extent, although there is no problem with the peso, but the dollar capital is a little troublesome. That's why he asked Doss. Santos.

"There is no big problem with the position on the dollar side." Looking at Harvey's gaze, Doss. Santos said categorically.

The Bank of Crédit Mexico also has several small branches in the southern state of New Mexico in the United States, which, although small in terms of performance and storage, can be used to make direct investments in the United States capital markets. By law, they are also part of the Federal Reserve's banking system and are required to report to the Fed on their positions and margins on a daily basis, which is why Harvey asked.

Seeing that there was no problem here, Harvey slapped the table and came to the conclusion: "Although our bank's dollar reserves are not large, this matter is related to our reputation and credibility in the foreign exchange market. My opinion is, exchange! ”

The dollars that enter Mexico are converted into pesos, part of which goes into the bank's vault and part of it goes into the account of the central bank. In addition, most of the U.S. dollars are placed in short-term U.S. dollar-denominated bonds, which are held by the Mexican commercial banking industry, which can be exchanged for U.S. dollars in their own accounts, and can also be sold in the market for exchange.

Of course, the latter is almost impossible to consider, because investing in bonds has its own interest, and converting dollars to dollars has few other profit points other than the exchange rate difference and handling fees.

Even so, Harvey had to bite the bullet and the debate had focused on whether or not to use the dollars in the banking system. In fact, in addition to them, several other large commercial banks have also had similar discussions, and the final conclusion is much the same, and they regard this situation as only an unexpected situation in the market. It's just that at this time, no one expected that this "unexpected" situation would happen one after another in the following days. (To be continued......)

PS: Thank you very much for the 2 monthly passes of the Demon Dragon Warrior and the heavy reward from Aline Irene!