THE ASSOCIATED PRESS

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WASHINGTON - Mexico's treasury secretary on Sunday blamed his country's volatile currency fluctuations on speculation, while predicting a calmer week ahead for the peso and Mexico's stock market.

As the peso took a beating, Mexico's central bank last week sold US$6.4 billion in foreign currency reserves in an aggressive push to boost its sagging currency.

Treasury Secretary Agustin Carstens said that the peso's decline "had nothing to do with the state of the economy" but could be attributed to an effort by some Mexican businesses to obtain profits through speculative manoeuvres.

"This does not reflect a macroeconomic weakness and is strictly of a speculative nature," Carstens told reporters in Washington, where the International Monetary Fund and World Bank held their annual meetings over the weekend. The Mexican treasury secretary is the head of the World Bank's policy-setting committee.

A government inventory of derivatives that Carstens blames for the volatility suggests the worst is over, he said.

Central banks across the globe are auctioning reserves to boost their currencies, which are sagging as risk-averse investors dump equities amid financial turmoil to instead seek refuge in the U.S. dollar.

Carstens said the government will be "more energetic" to avoid speculation that could rattle the currency again.