But they also expect inflation to slow to 5.1%.Ĭurrency forecasts reflect what could be expected given estimates for inflation, economic growth, interest rates and other economic variables, both in Mexico and the US, but they don’t consider extraordinary events as these are unknowns. In Banxico’s December 2022 survey, the median estimate for the exchange rate at the end of 2023 was 20.80 pesos per dollar, with estimates ranging from 19.25 to 22 pesos per dollar.Īs in 2022, economists are somewhat pessimistic about economic growth prospects for this year, expecting GDP to increase just 0.9%. It’s one of the world’s most-traded currencies and is the most-traded of Latin America’s currencies. Mexico’s peso is a free-floating currency on the world’s foreign exchange markets. What to expect for the Mexican peso in 2023? About 17.2 million tourists arrived by air, 56% more than the previous year, but there were 10% fewer tourists crossing the border and staying for at least one night. The number of foreign visitors in the January-October period rose 19% to 52.7 million, with spending up 49% at $22.5 billion. Mexico’s tourism sector also grew in 2022 Remittances -money sent to Mexico by people living abroad, principally from the USA- reached $53.1 billion by November, 13% more than in the first 11 months of 2021. The higher interest rates help the peso as they encourage investors to buy the currency, but can also discourage consumers from spending or small firms from taking on credit to grow their business. The rise in inflation led the Bank of Mexico to raise its reference interest rate from 5.5% at the end of 2021 to 10.5% at the end of last year. The rate of inflation started to recede toward the end of the year, and was 7.8% at the end of December 2022. The Mexican government helped to keep inflation down by subsidizing gasoline and diesel using extra money it earned from prices of crude oil exported by Pemex, the state oil company. This was mostly because of increases in the cost of food. Inflation was a problem last year, as consumer prices rose by the most since the year 2000.
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