Silva was referring to an armed peasant uprising in Chiapas (province). The riots, which took place in January, have not subsided and are still expanding. Recently, the government received news that the riot will spread to other states, which also means that the government army's encirclement and suppression of the armed riot is completely out of control.

As soon as the news spread, it immediately caused a huge shock, even more so than the news of the assassination of the presidential candidate of the Institutional Revolutionary Party, Croco, and General Secretary Ruiz. The whole of Mexico will become even more panicked, and the whole society will be thrown into chaos, and even the newly established government will be overthrown.

By this time, the President was in a state of exhaustion, and his meeting with the senior generals of the Wehrmacht had lasted seven hours, and Mr. President was due to give a speech to the army later. Therefore, even if there is a huge fluctuation in the foreign exchange market, he can't take care of it at this time.

Otis, as a high-level government, naturally also knows about the affairs of Chiapas. Hearing Silva say this, he knew that it was unlikely that he would want to see the president in the near future, so he could only suppress the anxiety in his heart and hang up Silva's phone sullenly.

After thinking about it for a long time in his large office, Otis called the Minister of Finance, who had not planned to communicate with Finance Minister Antonio immediately, because the two sides did not have a direct subordinate relationship and there was still some disagreement over foreign exchange reserves. But now that the matter is serious, he can only put down his mind and explain the changes in the foreign exchange market to the executive as soon as possible, hoping to get support from the Ministry of Finance.

As a result of the large deficit in the current account in the international trade account. In order to maintain the trade balance, the Mexican government must make up for it from the capital account, and the best way to attract dollar inflows is to issue government bonds, a tool that Mexico's Ministry of Finance is responsible for, and to date, the total price of US dollar denominated government bonds has reached as much as three to four billion dollars, accounting for about half of the total dollar capital inflows into Mexico.

This part of the foreign exchange reserves is placed in the Bank of Mexico as a liability for the Ministry of Finance. Otis needs to ask the Treasury so that the central bank can use some of these funds so that it can maintain the value of the peso in a critical situation.

"Antonio ......"

Before Otis could say what he meant. Finance Minister Antonio interrupted him. He said in a flat tone: "I already understand what you have to say, but this matter is not negotiable at all. In recent months, the Treasury market has been oversold and prices have continued to decline. The pressure on the Ministry of Finance is also high. ”

Antonio was right. In the midst of concerns about the political situation in Mexico. Many foreign investors have sold their Mexican government bonds in advance, and the Mexican Ministry of Finance has spent hundreds of millions of dollars on the bond market in order to maintain the issuance of dollar bonds at a normal price level.

Otis knows this. Because it is necessary to conduct open market operations, it cannot be separated from the central bank. He didn't expect that Antonio would use this incident as an excuse, knowing that in addition to investing in other funds, the Ministry of Finance often reserves tens of billions of dollars in dollars in the central bank, and these funds, together with the Bank of Mexico's own dollar funds, constitute Mexico's foreign exchange reserves, totaling nearly $20 billion.

However, the Bank of Mexico has lent a lot of dollar funds recently, because after the huge exchange phenomenon in the foreign exchange market, the major commercial banks have approached the central bank and exchanged a lot of dollar funds with the pesos in their hands, instead of using the dollar funds in their own accounts, which is their risk-averse business behavior, and the Bank of Mexico is not easy to say anything about this practice.

Otis cursed in his heart, knowing that it was impossible to get the Treasury to use their dollar funds under the current circumstances, so he could only discuss the possibility of peso depreciation with Antonio.

"Devaluation? Quite possibly! Antonio still said in an old-fashioned tone, "We are already discussing the possibility of depreciation internally, and with the current foreign exchange reserves, it should be able to cope with it, depending on the magnitude of the depreciation." ”

As for the devaluation, the Ministry of Finance is more welcome, because the dollar funds they have on hand can be exchanged for more pesos, so that their budget will be more free. Although more pesos will be spent in the future to repay the interest on dollar bonds, they can make up for it by issuing new bonds, as long as dollar funds continue to flow into the Mexican market.

Throughout, they didn't think about the Mexican peso becoming a free-floating currency because of the depreciation, because in that case, the result would be simply catastrophic. They may not be able to keep their dollar money or their current revenues. Because once the peso is liberalized, it will definitely depreciate sharply in the short term, and then the dollar funds will run wildly, and the bond market will collapse first, then the stock market, and then the interest rate will rise sharply, and now the treasury's balance will be immediately broken, and the fiscal deficit will be very serious, in short, it will fall into a terrible vicious circle.

Antonio does not have an intuitive understanding of the current foreign exchange situation, he simply believes that with Mexico's current foreign exchange reserves, at least for a period of time in the future, it will continue to support the value of the peso, so that he can say that the peso will depreciate.

"I'm afraid it's not as simple as you think!" Otis said with a wry smile, "I suspect that we have been targeted by international hedge funds, and our foreign exchange reserves will be severely affected in the next two days." As far as I know, there have been huge short orders in the IMM market. ”

Antonio was not familiar with the derivatives market, but he was keenly aware of the use of the word "also" in Otis's words, and he couldn't help but ask a little strangely: "Why, the foreign exchange market has been very unquiet recently?" ”

"It's not just uncalm, it's just an undercurrent!" Otis coughed lightly and said with an unusually bitter voice, "There has been a net outflow of dollars in the last two days, and we are all a little dumbfounded by the amount of money. As you know, the dollar funds have been in a state of outflow in the past few months, but the amount is not very large, but the net outflow in these two days has exceeded the previous strength, and even more than the total outflow in the previous 11 months! ”

"What?" Antonio's heart sank, and then he realized the seriousness of the situation, "Have you reported this matter to Mr. President?" ”

"How could it not be reported? It's just that the president can't spare time right now, so let's come up with a draft first, and then make a decision when he is free, on Monday, the 19th. It won't be long before your secretary tells you about it. I suggest that we start a relevant meeting as soon as possible, conduct preliminary communication first, and come up with a practical plan. ”

"Is it really that serious?" Listening to Otis's seriousness, Antonio couldn't help but become serious, and after thinking about it, he said, "Then tomorrow morning, I will bring ministerial-level personnel and relevant advisory groups, as well as our currency experts." ”

"Where else are there any currency experts?" Otis smiled bitterly and joked, "At this point, the opinion of experts can't change the course of events. Moreover, we are currency experts ourselves......"

……

On Zhongshi's side, a total of $1 billion worth of pesos was sold on this day, and now the number of pesos in the account adds up, at today's exchange rate, it is less than $3.5 billion share.

At this time, the amount of U.S. dollars in the accounts of Zhongshi's Skyline Financial Company and Tianyu Fund reached a staggering $13 billion, and in addition to his own $4 billion, the remaining $9 billion was borrowed, and the interest for a day was an extremely staggering amount. If the peso does not depreciate according to the historical trend, then Bell Stone will lose hundreds of millions of dollars.

This is only a rough estimate and does not include losses in exchange rate spreads. But it became clear to Bell that the Mexican government and the Bank of Mexico were already struggling to survive.

"Mr. Zhong, what should I do tomorrow?" Although the foreign exchange market is a 24/7 market, that is, a 24-hour market 7 days a week, but because the amount of Zhongshi exchange is too large, except for a few large multinational commercial banks, the main counterparty is only the central bank of the Bank of Mexico, and the Bank of Mexico often operates to comply with the regulations of holidays, so Garcia has this question.

"It's all converted to dollars, and it will be cleaned up when the market closes tomorrow. In addition to the Bank of Mexico, other banks can be exchanged, as long as you can find a rival in the foreign exchange market, these two days will be hard for you! Zhong Shi said in a firm tone, and at the end he gave a slightly apologetic condolence.

Although the Bank of Mexico may not be in the market all the time due to time differences and holidays, there are still commercial banks willing to exchange Mexican pesos around the world, which is why the Weishenme foreign exchange market is a 24-hour market.

“haode！” Garcia nodded, not saying anything else. However, in his heart, he was quietly thinking about whether to tell the news to the foreign exchange department of Chase Bank as soon as possible.

Looking at Garcia's solemn expression, Zhong Shi couldn't imagine what this middle-aged man with a rough appearance was thinking. He didn't break it either, because he wanted Garcia to do it!

Once commercial banks join the run, the Mexican government can only announce a depreciation of the peso, which will cause panic and a currency crisis, which will eventually turn into a financial crisis. All this is exactly what Zhong Shi wants, to challenge a country's foreign exchange system by himself, and finally knock it down, just like Soros did two years ago! (To be continued......)

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