Mexico: Mexican peso remains stable
August 1, 2011
On the last day of July, the Mexican peso (MXN) traded at 11.73 per USD, which was virtually unchanged over the 11.71 MXN per USD recorded on 30 June. Compared to the same period last year, the Mexican peso has experienced an 8.0% appreciation in nominal terms. In the last two years, capital inflows from developed economies looking for higher rates of return have driven a sustained appreciation of developing market currencies. That said, the Mexican Central Bank has refrained from raising interest rates from their record low of 4.50%, which contrasts with developments in the region and makes the Mexican peso somewhat less attractive than most of its regional counterparts. Moreover, the Bank is expected to maintain its loose stance in the months ahead, as inflationary pressures remain contained.