Mexico's central bank decided Thursday to increase its daily dollar auction from $52 million to $200 million to stop the peso's dramatic slide.
The new auction will start on Friday and run until September 30 to counter a threat that "the volatility of the international financial markets continues," the bank said.
The bank had launched the $52 million daily auction in March in a bid to stabilize the peso, which has fallen 20 percent against the dollar so far this year.
One dollar sold for 16.77 pesos on Thursday, compared to 16.55 a day earlier, according to private bank Banamex.
After the central bank's announcement, the peso rose slightly to close at 16.60.
The bank said it would continue to auction off an additional $200 million if the peso depreciates by more than 1.0 percent. It previously sold the extra dollars if the depreciations surpassed 1.5 percent.
The drop in oil prices, the strengthening of the US economy and the Greek debt crisis have weakened several currencies, including the peso.