Mexican government buys $7 bln from central bank reserves

MEXICO CITY, Sept 14 (Reuters) – Mexico’s government has bought $7 billion from the country’s central bank reserves of U.S. dollars, according to a statement from the Bank of Mexico on Tuesday.

The dollar purchase from the bank, known locally as Banxico, was part of its weekly account report dated Sept. 10.

Banxico attributed a recent dip in its reserves, down from a recent record of some $205 billion, to the government’s $7 billion purchase.

The finance ministry did not immediately respond to a request for comment on how it expects to use the new dollar infusion.

President Andres Manuel Lopez Obrador previously proposed that the reserves be used for early retirement of debt, much of it denominated in the U.S. currency.

The president has also hinted he might try to use funds from the recent allocation to Mexico of over $12 billion in so-called special drawing rights from the International Monetary Fund to pay down debt.

The federal government’s total external debt as of July stood at about $116 billion, according to official data. (Reporting by Sharay Angulo; Editing by David Gregorio)

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