Why isn’t the peso at 37 to the US dollar? A perspective from our CEO

Here is a mindblowing number to think about: If the peso had performed similarly from 2020 to the present as it did in the previous 25 years (from 1995 to 2020), the current exchange rate would be near 37 pesos to the US dollar!

That statistic puts into perspective how incredible the current exchange rate of 16.86 (as of Friday) really is. With the peso back near record highs in what seems like an unbreakable trend, I thought it would be a good time to do a refresher on the topic of the MXN:USD exchange rate.

For decades, the peso reliably lost about 10% of its value against the dollar every year. Although that devaluation was bad for some and good for others, its consistency and predictability allowed businesses, governments and families to plan around it. The fact that the past five-plus years have been so dramatically different — so unpredictable — has had some real impacts on Mexico.

With that in mind, I thought I would share some of the top columns I have written about the peso over these past several years to help us understand why its its happening, if it might continue, and what we can do about it. Each one tackles a different angle of the story. Please enjoy.

• When will the Mexican peso begin to behave rationally again? — Why the peso stopped following its old, predictable rules — and what “rational” behavior would even look like now.
• Is the peso punching above its weight? The results of our latest MND Peso Index™ — Our MND Peso Index™ compares real prices in Mexico and the U.S. to understand the real value of the peso.

When will the Mexican peso begin to behave rationally again? A perspective from our CEO

• Mexico in Numbers: The peso’s wildest swings since 2000 — A numbers-driven look back at 25 years of exchange rate history.
• What’s next for the peso? — A forward-looking read on where the exchange rate could realistically head next.

Mexico in Numbers: The peso’s wildest swings since 2000

• Is the peso about to peak? — The signs that suggest the peso’s historic run might be nearing its limit.
• How to stop a speeding super peso — What tools the government and Banco de México actually have to slow the peso down, and whether they’re likely to use them.

How to stop a speeding ‘super peso’: A perspective from our CEO

• How can we predict what will happen next with the Mexican peso? — A practical framework for reading the signals, so you’re not just guessing.
• Pros and cons of the superpeso — Who wins and who loses when the peso gets this strong, and why it’s not all good news.

Pros and cons of the ‘superpeso’: A perspective from our CEO

Travis Bembenek is the CEO of Mexico News Daily and has been living, working or playing in Mexico for nearly 30 years.