Low Mexican Peso Brings Pain for Some Businesses, Gain for Others Nancy Caouette - JTW
go to original July 24, 2015

The Mexican peso fell to a new low Thursday hitting 16.16 against the U.S. dollar.

A weak peso reflects expectations of an interest rate hike in the U.S., low crude oil prices and the impact of the Greek debt crisis, according to experts.

In the past year, the peso has fallen steadily, going from about 13 pesos per dollar last July to its current level of 16 pesos.

“It’s a depreciation of roughly 25 percent in one year. But when compared to other currencies in the world, Mexico’s peso is not doing worse. The peso is not weaker. The American dollar though is really strong,” said Mexican analyst Rafael Carrero. He told Anadolu Agency that the currency should continue to slide unless the U.S. Federal Reserve decides against what is expected to be an interest rake hike.  

The constant slide in the peso makes life harder for local businesses, but it’s a boon for some other parts of the economy.

“The tourism and export businesses, like car the industry, always gain a commercial advantage from a low peso. The local businesses are more seriously affected by a strong dollar,” Carrero said.

“However, local manufacturers that usually import pieces and products will more likely choose to produce it in Mexico, which is stimulating Mexico’s economy,” added Carrero, who is the director of currency trading at the Actinver financial group.

But despite the falling peso, consumer prices rose less than expected in the first half of July.

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