2016 was a pretty volatile year for the Mexican peso. In 2016, the currency depreciated by more than 15 percent and the decline against the dollar accelerated after Donald Trump got elected as the next President of the United States. Banco de México, which is popularly called Banxico in the financial world tried to reign on the declining dollar/peso exchange rate by raising interest rates five times but ultimately failed to popup the peso.

After being formally elected by the electors in December, Donald Trump used his tweeter accounts to threaten companies with punitive tariffs of as much as 35 percent, if they plan to shift their manufacturing operations from the United States to Mexico and sell the products back in the United States. The Mexican peso was already roiling over his tweets and dropped sharply when Ford Motor Company announced that they are scrapping plans to invest $1.6 billion in Mexican plant and instead, would use the money to invest in the plants in Chicago and hire as much as 700 people. The Mexican peso declined almost a percent in response.After Ford, Mr. Trump targeted General Motors’ plant in Mexico, saying GM needed to be taxed for certain versions of the Chevrolet Cruze small car that it imports from Mexico to U.S. dealers.

On Thursday, after sinking to 21.61 per dollar, the Mexican peso bounced back to 21.12 as Banxico stepped in and bought around $51 billion worth of peso using $2.37 billion from its forex reserve. But it took Donald Trump just 28 words on twitter to undo the move as he tweeted, “Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax”. The peso is currently trading at 21.34 per dollar.