Back in the summer of 1982, I was working and living in Mexico. It was a wonderful experience, and I learned something about Mexicans. Don’t tell them that the peso is falling because they will give you that look, if you know what I mean.
To be fair, 2025 is not 1982. That was the year that a bunch of currencies experienced devaluations, especially Mexico. Things got so bad that even Paul McCartney decided to write a song about it:
The pound is sinking, the peso’s falling
The lira’s reeling and feeling quite appalling
I don’t remember anything about lira reeling or the pound sinking. I do remember UK ships heading to the Falklands.
Anyway, down in Mexico the peso is falling. This is the story:
The Mexican peso depreciated against the US dollar for a fourth consecutive trading day on Monday, according to end-of-day exchange rate data from the Bank of Mexico (Banxico).
The peso closed at 20.72 to the greenback after ending Friday at 20.70 to the dollar, Banxico data shows.
Why does this matter? A weak peso means that dollars are more expensive. It also highlights the importance of remittances, currently $ 60-plus billion.
We talk about tariffs, but it’s remittances that allow President Trump to negotiate with Mexico. What if we put a tax on those and use that money to pay for the border or to compensate victims of fentanyl?
The other thing to remember is that a weaker peso is an indication of concerns south of the border over the economy. Presidenta Claudia Sheinbam has made a big deal about the local economy, but Mexicans are not convinced, or at least the ones that I hear from.
According to The World Bank, Mexico’s GDP will grow 1.5% in 2025. That may be growth, but not the number Mexico needs. According to the report, Mexico is not taking advantage of the nearshoring trend or taking advantage of its proximity to the U.S.
So the peso is falling and that’s never good, unless you are a tourist and going to Cancun.
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The peso is falling - American Thinker https://t.co/GF8SrvVsLz
— Silvio Canto. Jr. (@silvio_canto) January 15, 2025
