Last Thursday, the consulting firm Moody’s Analytics, and which is independent of Moody’s Investors Service (which is the credit risk rating agency), warned about an “imminent” depreciation of the Mexican peso of 20% against the dollar, between the end of 2022 and throughout 2023.
“We do not agree with an accelerated depreciation scenario, such as the one that has been discussed, something similar happened in 2020 with covid-19 when the exchange rate went from 19 pesos to 25 pesos per dollar, it is more or less the level of depreciation that estimates the scenario, something very similar to what happened with covid would have to happen with a drop of -8.2% to see such a significant variation, it is very likely that the exchange rate will adjust over time, but We do not see that in one or two years,” explained Undersecretary Yorio.
He commented that there are several factors that strengthen the peso against the dollar, for example, that the Mexican peso is one of the most used currencies to hedge against movements of other currencies in emerging countries, which reflects the solidity of the Mexican peso.
He explained that Mexico also has a flow in dollars that is giving support to the peso, because they have been accumulating international reserves significantly.
“We also have a flow of remittances, they continue to be an important flow of dollars for the economy, and having reached historical levels derived from the economic situation that the United States is experiencing with a clear labor shortage, it is very difficult to foresee that the reserves will go to adjust even if they enter a recession, and the flow of Foreign Direct Investment that we are experiencing is greater in 2022 compared to the previous 4 years, so this is giving us a flow of dollars that keeps our exchange rate quite anchored” , culminated.
