By Michael O’Boyle and Patrick Rucker

MEXICO CITY, April 6 (Reuters) – Mexico’s central bank could try to tap the brakes on a dogged appreciation in the peso before currency gains start to threaten the competitiveness of local exports.

The peso strengthened 6.0 percent in the first quarter to trade at its strongest in almost 1-1/2 years, thanks to a rebound in demand for Mexican exports from the country’s top trading partner the United States.

Mexico’s central bank has been buying U.S. dollars since March to build a war chest of reserves ahead of any possible volatility in global markets once the United States begins to raise interest rates. The program has also poured pesos into the market.

Countries like Brazil and Colombia have recently used similar tactics to help dilute the value of their currencies and some analysts are betting that Mexican policymakers could accelerate their dollar buying to slow the peso’s advance.

“The central bank will increase its mechanism to accumulate reserves, and this will undermine the peso’s momentum,” said Gabriel Casillas, an economist at JPMorgan in Mexico City.