©Reuters. The strength of the Mexican peso contains inflation and attracts investors
Mexico City, Apr 7 (.).- The strengthening of the dollar against the dollar of 3.21% in the first quarter of the year compared to the previous three months will help control inflation, which currently stands at 7.45 %, a rate not seen in 20 years, and also to attract investors.
Regarding the euro, the appreciation was 5.81% quarter-on-quarter in the first three months of the year with a price of 21.99 units per euro.
The appreciation of the peso in this first quarter was the highest since the fourth quarter of 2020.
The Mexican peso, which was around 18.5 points per dollar before the pandemic, suffered its worst moment in March 2020 when it exceeded 25 units per greenback.
The Mexican currency closed 2021 with an annual depreciation of 3.01%, trading at 20.51 units per dollar on the last day of the year.
According to the director of economic analysis of Banco Base, Gabriela Siller, the Mexican peso is now in fifth position both in appreciation against the dollar and the euro.
Only behind the Brazilian real, the Peruvian sol, the Chilean peso and the Colombian peso.
The Mexican peso has a “free-floating” exchange rate regime, so it depends on the interaction of supply and demand and to Mexico “a lot of foreign currency has entered through exports and remittances,” he explained.
Mexican exports are expected to grow between 7% and 10% this year, driven by growth in the United States, while remittances could show growth between 10% and 13%, he pointed out.
The Mexican peso is expected to continue appreciating and could reach a level of 19.60 pesos per dollar.
As Siller explained, the appreciation of the peso is a “great advantage” because now it does not “pressure” inflation – above 7% for months, its highest level in 20 years – in terms of imported products.
This Thursday, the National Institute of Statistics and Geography (Inegi) reported that in March inflation stood at 7.45% year-on-year, its highest level since 2001.