In a year marked by global financial volatility, the Mexican peso closed 2023 with its greatest appreciation since 1995, according to data from the Bank of Mexico (Banxico).
At the close of trading on Friday, the national currency was quoted at 16.91 pesos per dollar, the equivalent of an appreciation of 2.55 pesos or 13.11 percent compared to the level recorded last year.
Gabriela Siller, director of economic and financial analysis at Banco BASE, explained that the appreciation of the peso was a consequence of a greater flow of dollars through remittances, exports and foreign direct investment.
Likewise, the currency was strengthened by the level of the interest rate of the Bank of Mexico (Banxico), which at the end of 2023 was at a historical level of 11.25 percent, and by the relocation of foreign companies, a phenomenon known as nearshoring.
“The peso was also helped by the fact that the six-year term is close to ending and the risks of losing the autonomy of Banxico or the investment grade of the credit rating of Mexico’s sovereign debt did not materialize,” the specialist mentioned.
With the data obtained at the end of December, the Mexican peso also accumulated nine months of appreciation. In all of 2023, November was the best month for the national currency, gaining 3.68 percent against the dollar.
“In November the peso gained ground again, amid signs of weakening of the labor market in the United States, which allowed speculation that the Federal Reserve would not raise the interest rate again and could even cut the rate in the first quarter of the year. 2024,” said the Banco BASE analyst.