Citigroup (NYSE:C) Adding Mexican Securities to World Government Bond Index

The market responded positively to the news Citigroup (NYSE:C) had determined the Mexican local-currency bonds are eligible to be included in the World Government Bond Index, sending the Mexican peso to a 17-month high yesterday.

Among the top 16 highest traded currencies in the world so far in 2010, the Mexican peso has been the leading performer of them all. Once the requirements to be added to the WGBI are met, and also leading up to that time, the peso should get some additional upward movement as a result, although there are of course a number of other factors connected to whether it does or not.

What the announcement and inevitable inclusion in the WGBI will mean for the peso is a higher awareness and interest from foreign investors, which should help to move the peso as well.

As far as the requirements related to the local-currency bonds, there are basically three of them: barriers to entry, credit and size. At this time they all meet the requirements, but they must do it for three months in a row before being officially confirmed as eligible for being included.

Citigroup expects Mexican bonds to be added as early as October 2010.

Once they are on Citigroup’s World Government Bond Index, they will be the first Latin American country to be added to it.