Economy

Mexican peso, the least devaluated currency in the world against the dollar

The Mexican currency has kept its value with a lower level of depreciation in comparison with the world’s other currencies

By Román Franco2022-09-29T21:20:00+00:00

Actions carried out by the US government to stop inflation through an increase in interest rates is causing several world currencies to face difficulties to keep themselves stable.

The actions by the United States has had a negative impact both in countries with stable economies and indebted countries.

These actions have caused a reaction in the main markets of the world, which in turn have caused several solutions to be suggested off the record, with a possible intervention by the central bank to stop the dollar. This will repeat what occurred in 1985 when the five greatest economies at that time: the Unites States, Germany, France, the United Kingdom, and Japan agreed to boost the value of their currencies against the dollar, making it lose a fourth of its value back then.

Due to the economically challenging situation the world is currently facing, the reality in Mexico, right now, is different. Following Brazil and Switzerland, Mexico is one of the countries whose currency has gone through the least economic depreciation due to the actions by the United States. Japan and Sweden have, so far, have had a deeper devaluation of their currency with a drop of approximately 23%.

Among the most stable places, Mexico is currently in first place by having a currency with a variation of -0.3 %. Brazil, in second place, has had a devaluation of -3.8%.

One of the factors that has caused this favorable situation in the Mexican economy has been that, during the COVID-19 pandemic, the Mexican government limited social aid and did not resort to external debt through economic aid, which most countries did, including the United States. Another important factor is that, during the pandemic and afterwards, remittances played an important role, since they provided Mexico with a great amount of money that was spent internally, as the borders were closed.

These actions have caused Mexico to keep its currency with a minimum amount of devaluation in comparison with the rest of the world.