He super weight Mexican, known under that concept for its proven strength over the past two years, continues to arouse comment in the financial community. Recently, the Mexican peso weakened and ended with a value of 18.46 per dollar, a figure not seen since April 19, 2018, according to data from the Bank of Mexico (Banxico).
Despite this fall in value, the super peso continues to be viewed positively by specialists, who say that a fall in its price against the dollar does not affect its upward trend to a great extent.
However, the performance of the super peso at a low exchange rate is inconvenient for exporters and recipients of remittances as it affects the income of money to Mexican households.
Likewise, the super peso also impacts the value of exports and the increase in the cost of tourist services, two key sectors for the Mexican economy.
What reasons explain the super weight winning streak?
At the beginning of 2023, the Mexican super weight increased its value considerably.
Some reasons that explain its good performance are reflected in the appetite for risky assets in the United States.
To this is added that the Mexican peso was appreciated in approximately 3% against the US currency during the first months of 2023, which placed the Mexican peso at its best level in three years.
According to analysts, the reasons for this growth are due to the wide interest rate differential with the United States, the government’s strict fiscal stance, the country’s sound external finances, high operability of the peso, and mixed macroeconomic and corporate data in the United States.
What are the disadvantages of super weight?
The rise of the super peso brings with it a series of disadvantages that could end up turning its hegemony into a financial and economic crisis for Mexico.
According to specialists, in the trade balance, the appreciation of the Mexican peso is not favorable since it tends to generate fewer exports, which affects the performance of the economic indicator.
“The appreciation (of the Mexican peso) can make national productivity lose competitiveness,” pointed out the stock market analyst Victor Carmona to Bloomberg Online.
Meanwhile, he pointed out that another disadvantage of the price of the super peso is that it becomes cheaper to import due to the strength of the Mexican peso against the dollar, and with this, foreign products become cheaper, causing a loss of competitiveness on the part of local products.
Another negative factor is the exchange difference for foreign tourism and even with remittances, since fewer pesos are delivered per dollar.
Source: Gestion
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