The Latin country that ‘wins the battle’ against the US dollar

Mexico is the Latin American country that it has outpaced the US dollar. On May 15, the Mexican peso reached a minimum value that it had not registered for seven years: it traded at 17.62 pesos per dollar.

Gabriela Siller, Director of Economic and Financial Analysis of Grupo Financiero Base, indicates that There are several factors that have altered the dollar and possible investments in the Mexican country.

Last Monday the Mexican currency was trading at a maximum of 17.62 pesos per dollar. On Tuesday the 16th, it closed with a depreciation of 0.36%, that is, 6.27 cents less, trading at 17.48. On Wednesday the 17th, the behavior of the Mexican currency also had a slight depreciation, closing at 17.46 pesos per dollar.

The foregoing, added Siller, is due to the increase in the amount of the flow of dollars that arrive in the country, for exports and investments made in foreign currency. Also, because the Bank of Mexico has a restrictive monetary policy attitude.

For her part, the deputy director of Economic Analysis of Grupo Financiero Monex, Janneth Quiroz, indicated that the behavior of the Mexican peso is due to the weakening of the dollar. She also pointed out that there are published reports in which the US economy remains in a slowdown scene and this can generate nervousness about the debt ceiling of this country, due to a possible default on debt obligations.

Additionally, Quiroz concluded that the Mexican currency has future plans from which it has benefited, such as the phenomenon of relocation of supply chains in the country, called ‘nearshoring’.

Finally, Siller mentions that there is an international preference to invest in the Mexican peso, which is why it is considered one of the most liquid currencies in Latin America: “The appreciation of the peso is favorable for the reduction of inflation, since the price of imported items falls”.

However, he added that for recipients and exporters the effect could be negative, since remittances lose their purchasing value and exports would increase their value making these actions more expensive.

PORTFOLIO AND EFE