The value of one US dollar dipped below 17 Mexican pesos for the first time since 2015 on Wednesday morning.
Data from the financial and media company Bloomberg showed that one greenback was buying 16.98 shortly after 7:30 a.m. Mexico City time.
That exchange rate represented the peso’s strongest position since December 2015. The peso subsequently weakened slightly and was trading at 17.00 to the dollar shortly before 9 a.m.
The Mexican peso has appreciated 14.77% against the US dollar this year, making it the world’s second best performing currency against the greenback.
High interest rates in Mexico — the central bank’s benchmark rate is currently 11.25% — is seen as one factor that has contributed to the peso’s positive performance this year. Strong incoming flows of foreign capital and remittances are among the other factors cited by analysts.
Janneth Quiroz Zamora, chief economist at the Monex financial group, wrote on Twitter that positive data on domestic consumer demand published by the national statistics agency INEGI on Wednesday morning gave the peso a boost.
French bank BNP Paribas is predicting that the USD-MXN exchange rate will be 16.70 at the end of the year, but the four largest banks in the Mexican market – BBVA, Banorte, Citibanamex and Santander – all predict that a greenback will buy more than 18 pesos at the close of 2023.