Mexico’s peso (MXN) falls to a new low against the U.S. dollar as high volatility, and nervousness in emerging markets remains a concern.The Mexican peso has been falling against the dollar with renewed weakness on Global Market rout. Emerging market currencies (Mexican Peso, Russian Ruble, and Turkish Lira) are all getting squeezed by China’s sputtering economy, falling commodity prices, and the prospect of interest rate increase by Federal Reserve.
Currently, the Conversion Rate is about 17 Peso per 1 USD
Check the Current Conversion Rate Here
One of the major factors in the decline of Mexican currency is the drop in the price of oil. Mexico’s oil supply is the 9th largest in the world and is one of Mexico’s top 5 exports. Mexican stocks and currency fall is triggering a central bank auction of $200 million a day. Banco de México is expected to match any U.S. interest rate hike in September.
Even though the predictions of doom and gloom in emerging markets are overblown, the pressure on peso against dollar remains a reality in near future. The decline of the peso in the last few months can trigger a real inflation to the Mexican consumers. However, travelers to Mexico can now enjoy their money to stretch even more against peso holders. The lower exchange rate can attract foreign direct investments.
Mexico Economy: Affects to Mexico and the Consumers
So far the economy has remained resilient to the fall of the Mexican peso. The battered peso may push annual inflation rate to 3.5% versus the central bank’s 3% target.
- Gas price in Mexico has risen over 12% this year alone.
Benefits to Travelers
While goods purchased in US Dollar is more expensive for Mexico, sunny Mexican vacations are coming at a premium discount for Americans and Canadians with the recent strong upward momentum in the dollar. Individuals and tourists visiting Mexico can expect 10 – 15% ‘discount’ for food, entertainment, travel and medication.
- Always try to exchange your US dollars at ATMs.
- Use your credit cards, as their rates are automatically calculated when you use the card – and reflect the actual exchange rates.
- Look for ‘Black’ credit cards, or cards with no foreign transaction fee.
- Avoid the tourist, airport or train, exchange rate kiosks, as they may have hidden costs.
- Try to have some Pesos when traveling, as local operators who accept US dollars may give poor exchange rates.
After a decade of high inflation in the wake of the Oil Crisis and an external debt default in 1982, US dollar equaled 3,000 old pesos. The new Mexican peso has been set since 1993 for 3 pesos to every US dollar. The Mexican peso has steadily lost value against the US dollar over time to the exchange rate of near 17-to-1. Mexico’s central bank has been making moves to bolster the currency by auctions.
Global, August 24th, 2015 was seen as Black Monday as the Shanghai SE Composite Index, The Shenzhen Composite Index, and the ChiNext Index all fell by 8.49%, 7.5% and 7.5% respectively.
- Wall Street Journal: Mexican Stocks, Currency Fall on Global Market Rout
- Graph: https://www.x-rates.com/graph/?from=USD&to=MXN&amount=1