The Mexican currency depreciated 22.8% against the dollar in 2024, completely reversing the ‘superpeso’ phenomenon, the record appreciation of almost 13% in 2023, given the uncertainty created by Mexico’s judicial reform and the triumph of Donald Trump in the United States presidential elections.
The exchange rate ended this December 31 at 20.78 pesos per US dollar, above the level of 16.91 registered on December 29, 2023, according to information from Banco de México.
With this, Mexico’s currency ends 2024 as the third most depreciated emerging currency, only behind the Brazilian real and the Argentine peso, said Gabriela Siller, director of Economic Analysis at Banco Base.
The Mexican peso, which had not depreciated so much in a year since 2008, when the financial crisis began in the United States, had its fourth worst annual performance since the country had a free-floating exchange rate regime in December 1994, recalled the analyst.
“The Mexican peso lost ground due to greater risk aversion due to the result of the elections (Mexican on June 2), the approval of controversial constitutional reforms and Donald Trump’s threats against Mexico,” Siller explained in his ‘2024 Report: Exchange market’.
The effect of Mexico’s policies
The Bank of Mexico reported a price of 16.97 on May 31, the last day before the June 2 elections in which the ruling party’s presidential candidate, Claudia Sheinbaum, won.
A week later, the Mexican currency fell 8.19%, closing on Friday, June 7, at 18.36 units, then its worst level since March 2023.
This reflects that analysts anticipated Sheinbaum’s victory, but did not foresee that his alliance of parties would obtain a qualified majority, two-thirds, in Congress, with which he can reform the Constitution without negotiating with the opposition.
In particular, the market has reacted nervously to the judicial reform that as of June 1, 2025 will allow the popular election of judges, magistrates and the Supreme Court, and to the elimination this December of the autonomous regulators of economic competition, telecommunications and energy.
Trump’s coup
In addition, analysts agree that the uncertainty caused by the electoral victory on November 5 of Trump, who has promised to impose 25% tariffs on all Mexican products, has weighed if Mexico does not stop “the invasion” of migrants and drugs.
As an example, the Moody’s agency reduced its growth forecast for the Mexican economy by 2025 by half, to 0.6%, in November in light of the Republican’s policies.
“There is caution before the start of Donald Trump’s presidency on January 20 due to what may happen in terms of tariffs and immigration,” a CiBanco report indicated this Tuesday.
(With information from EFE)
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