Mexican peso appreciates 0.62% in the week after central bank decision

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Mexico City, Dec 17 (EFE) .- The Mexican peso closed this Friday with a weekly appreciation of 0.62%, trading at 20.79 per dollar in a third consecutive week of correction after the decision of the Bank of Mexico (Banxico ) of raising interest rates.

The data implies a weekly appreciation of 13 Mexican cents compared to the exchange rate of 20.92 units per greenback from the previous Friday reported by Banxico.

Throughout the week, the exchange rate touched a minimum of 20.70 and a maximum of 21.36 pesos per dollar, Gabriela Siller, director of economic analysis at Banco Base, explained to Efe.

“The peso closed as the third most appreciated currency, after Banco de México announced on Thursday an increase in the target interest rate of 50 basis points to 5.50%,” the analyst said.

Siller also warned that Banco de México adjusted its inflation projections upwards, predicting that the annual price increase will remain above 4% until the fourth quarter of 2022.

“Another factor that contributed to the appreciation of the peso was the decision to remove from the statement the argument that inflationary pressures are transitory,” he added.

The Banco Base analyst highlighted that the appreciation of the step occurred despite the strengthening of the US dollar, which closed the week with a strengthening of 0.42%, according to the weighted index.

The Mexican peso, which was around 18.5 units per dollar before the pandemic, suffered its worst moment in March last year when it exceeded 25 units.

The COVID-19 pandemic crisis caused a historic 8.2% contraction of Mexico’s gross domestic product (GDP) in 2020, the worst crash since the Great Depression of 1932.

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