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(Reuters) - Tropical Storm Franklin was weakening on Tuesday over the Yucatan Peninsula, but it could regain strength once it passes over the southern Gulf of Mexico, the U.S. National Hurricane Center said.

The storm was located about 40 miles (65 km) east of Campeche, Mexico and was packing maximum sustained winds of 40 miles per hour (65 km/h), the NHC said.

Franklin is forecast to begin strengthening again on Tuesday night and Wednesday as it moves over the Bay of Campeche, the weather forecaster added.

The storm made landfall late on Monday in a sparsely populated area of Quintana Roo state south of the beach resorts of the Riviera Maya, according to Mexico’s interior ministry.

The Riviera Maya refers to a Caribbean costal area that encompasses such cities as Cancun.

A hurricane watch is in effect for Mexico’s Gulf of Mexico coast state of Veracruz.

Last week, the World Bank said it would issue $360 million of a three-year catastrophe bond that pays out to Mexico if it is hit by a hurricane or an earthquake.