Peso's Record Highs Raise Questions About Mexico's Economic Future
According to Mexico News Daily's CEO Travis Bembenek, who has been living in Mexico for nearly 30 years, the Mexican peso has defied its historical trend of losing around 10% of its value against the US dollar every year. In fact, from 1995 to 2020, the peso had a stable devaluation pattern, but since 2020, it's performed differently.
Looking at the numbers, if the peso had maintained its previous trend, the current exchange rate would be around 37 pesos to the US dollar. However, as of Friday, the exchange rate is 16.86, which is near record highs and has left many wondering what's behind this drastic change.
The article highlights various columns written by Bembenek on the peso's behavior, including its unpredictability and impact on Mexico's economy. It also touches on the concept of a 'superpeso,' where the peso becomes too strong, and how this can have both positive and negative effects on different groups in society.
The author notes that the government and Banco de México may have tools to slow down the peso's rise, but it's uncertain whether they will use them. The article aims to provide a framework for understanding the peso's behavior and predicting its future movements.