Maps Lot Video Lot Prices Buying & Owning Property Cost of Living Price Level Banking Insurance Labor Utilitities Phones & Internet
Driving & Flying Loreto Vs La Paz Construction DIY Construction Home Finding Loreto Property La Paz Property American Efficiency
Perfect Loreto History The Peso Baja Economy Infrastructure Culture Loreto Video Fishing Diving Recreation Dining Whale Watching
Stability of the Mexican Peso, Baja California Sur, Mexico
The story begins in 1982
In 1982 Mexico defaulted on its external debt due to an oil crisis in the late 1970s. The immediately following period saw rapid hyperinflation followed by devaluations until Mexico’s President Carlos Salinas adopted the “Stability and Economic Growth Pact". On January 1, 1983, the Bank of Mexico introduced a new currency, the “nuevo peso” (MXN) written “N$” followed by the numerical amount. One new peso, or N$1.00, was equal to 1,000 of the obsolete previous MXP pesos. On January 1, 1996, the MXN abreviation was maintained but the term “nuevo” was dropped from usage. Since then and up to today, the Mexican peso has been and is very stable due to foreign investment and an ever growing economy.
NAFTA and Increasing Production.
Since NAFTA in 1994, Mexico entered into treaties and trade agreements with the United States, Canada, and other countries. Mexico's production increased and exports increased and Mexico currently is the 14th largest economy in the world. Since 1992, Mexico has increased its manufactured exports to the USA which now 80% of all Mexican exports . Mexico's trade with Canada and the USA has tripled since 1994. Oil is one of Mexico's important exports and the USA is a pricipal customer. All these factors return wealth to Mexico, shoring up economic strength and stability. Credit is being introduced to the Mexican consumers and pent up consumer demand for real estate and consumer goods is keeping Mexico's economy growing and stable.
Mexican Inflation
Inflation is no longer the calamity that it used to be. Inflation has been between 2% to 4% for the last ten years. Economic growth is stable at around 3% per year. I am absolutely amazed at the stability of the peso. Prior to 1983, the Mexican peso was a joke. If you were in Baja for a week’s vacation, the pesos’ value would devalue about 2% to 5% in just seven days. For example, if something cost $1,200 pesos on day one of your week’s vacation, it might cost $1,250 pesos at the end of the week. But, over the last 9 years, the peso has been very stable. In fact, the Mexican peso is now among the 15 most traded currency units in the world, and is the most traded currency in Latin America. Living in the Baja is getting more stable due the stable economy.
In December of 1999 the exchange rate was $9.75 pesos per $1.00 US. Today in 2008, the exchange rate is $10.15 pesos per $1.00 US. Not bad. I can live with that. In fact, over the last year the US dollar has steadily fallen against the Mexican peso! I never, ever thought that would happen, but it did. TOP