Fears for Mexico's Economy Grow as the Peso Nears the 20 to the Dollar Mark Patrick J. McDonnell and Cecilia Sanchez - The Los Angeles Times
go to original September 25, 2016

A bank in Mexico City displays the dollar exchange rate on Sept. 22. (Yuri Cortez/AFP/Getty Images)

The battered Mexican peso has tumbled to historic new lows in recent days, nearing a psychological barrier of 20 pesos to the U.S. dollar and causing anxiety on the streets, at businesses and in the halls of government.

Among other factors, many point to the recent rise in U.S. presidential polls of Donald Trump, the Republican nominee who has vowed to build a wall along the U.S.-Mexico border and has been widely accused here of Mexico-bashing.  

“There is a very clear relation with the [U.S.] electoral process,” Mexican President Enrique Peña Nieto told Radio Formula last week, linking Trump’s improved standings in the polls to the peso’s doldrums.

The Mexican currency plunged to a record low of about 19.90 to the dollar last week and has hovered near 20 to the dollar for days. Exchange houses are already posting signs offering a 20-peso exchange rate, a jarring sight for many here.

Despite official declarations downplaying the devaluation, some analysts are warning that things could get worse and assailing what they call government inaction.

“It appears that the authorities in charge of the politics, economics and finances of the country are flummoxed, paralyzed by the magnitude of the devaluation,” wrote columnist Enrique Galvan Ochoa in Mexico’s La Jornada newspaper.  “And the effects of the phenomenon could extend to the large companies of the private sector, deeply indebted in dollars.”

Peña Nieto, already facing record-low approval ratings, lamented that many Mexicans view a falling peso as “synonymous with a crisis.”

Read the rest at The Los Angeles Times

Related: Peso Depreciation Increases Drug Prices in Mexico (Prensa Latina)

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