Soon after the World Health Organization declared Covid a pandemic on March 11, 2020, the Mexican peso began to experience a rapid decline in value against the US dollar-briefly touching 25 pesos by the end of March 2020. The currency then stabilized again and from 2018 to 2020 it traded in a range of 18 and 20 pesos to the US dollar. The peso continued to weaken throughout 20 and, after briefly touching a new low of 21.50 in January 2017, the peso began a robust rally, and by September 2017 it was trading at around 17.60 on foreign exchange markets. Mexico survived the 2008 crisis largely intact, and by October 2010 the peso recovered about half of its lost value, trading at around 12.50 to the dollar.įrom 2011 to 2014, the currency stabilized and traded inside a range of 13 and 14 pesos to the dollar but in late summer of 2014, the peso began to slide again, and in November of that year it broke the psychologically significant ‘20-to-1’ level. The currency’s value buckled in August of 2008, falling from 10 to more than 15 pesos per dollar in March of 2009, as investors sold Mexican stocks and bonds, often for cash to change back to dollars to meet other obligations. Since that crisis originated in the US, its effect on Mexico was much greater than it was on other countries which have fewer (or smaller) trade and investment ties. Mexico’s peso from the late 1990s to 2010Īfter briefly reaching 11.50 to the dollar in the late 1990s, the peso had several years of ups and downs, gaining to less than 10 to the dollar just before the global economic crisis of 2008. Over the last seven decades or so, different governments have applied different measures for managing the peso’s exchange rate, depending on their perception of the country’s needs at the time.įrom 1954 to 1976, the Mexican peso was held at a fixed rate of 12.50 ( old pesos) to the US dollar.Ī devaluation in 1976 was followed by a long period of different exchange controls which included outright restrictions at times, multiple rates at others, and a system of ‘exchange rate bands’ that allowed a steady but gradual depreciation of the currency.Ī continuing series of devaluations through the late 1970s and 1980s -some major, some controlled- culminated in an economic blowout in December 1994, when the country’s reserves became depleted following a year of capital flight, and that led to a free-floating exchange rate that has been maintained ever since, with the central bank only intervening in times of distress in markets. From controlled exchange rates to free-floating currency Periods of stability have been followed by periods of great turmoil -and resulting devaluations- followed by rallies and stabilization.Īn irony -economists would say corollary- is that the only times the peso has gone through periods of appreciation against the dollar has been in the decades when it was allowed to float freely, with no exchange controls in place, few or no price controls in the domestic market, and no restrictions on withdrawing capital or profits. Mexico’s peso has had an assorted history against the US dollar.
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