The Bank of Mexico is widely expected to lift its benchmark interest rate by 75 basis points at it's meeting on Thursday. File photo
Inflation eased in October compared to the previous month but remains well above the rate targeted by the Bank of México (Banxico), which is widely expect to lift its benchmark interest rate by 75 basis points on Thursday.
The national statistics agency INEGI reported Wednesday that the annual inflation rate was 8.41% in October, down from 8.7% in September. The October figure was slightly lower than the average 8.46% expectation of economists polled by the news agency Reuters.
Consumer prices were 0.57% higher last month than in September, INEGI said. The annual core inflation rate, which strips out volatile food and energy prices, reached a 22-year-high of 8.42% in October, up from 8.28% in September.
Data indicates that headline inflation – which was also 8.7% in August – may have peaked, but core inflation remains, for now, on an upward trajectory.
The pink line represents a year’s trajectory of Mexico’s inflation rate by month. The green line represents the same period for core inflation, which strips out volatile food and energy prices. Sistema de Información Económica
“Core inflation remains stubbornly sticky,” said Andrés Abadía, chief Latin America economist at economic research consultancy Pantheon Macroeconomics. “This, and still-rising [core] inflation expectations will push Banxico to hike … the main rate by 75 basis points.”
The central bank, which targets inflation of 3% with tolerance of 1% in both directions, has lifted its key rate by 0.75% after its three most recent monetary policy meetings, following the lead of the United States Federal Reserve on each occasion. Another hike of the same size on Thursday – the Fed hiked rates 0.75% last week – will lift the benchmark interest rate to 10%. The current 9.25% rate is already the highest since the central bank introduced a new monetary policy regime in 2008.
Data published by INEGI on Wednesday showed that fruit and vegetables were 12.63% more expensive in October than a year earlier, meat prices were up 15.61%, non-food goods cost 8.03% more, services were 5.3% dearer, energy (including) electricity was 3.77% more costly and housing expenses rose 3.14%.
Mexico's latest commitment to improve its emissions target to 30% comes while it is also spearheading polluting projects like Pemex's Olmeca oil refinery in Tabasco to promote energy independence. Cuartoscuro
Mexico will increase its greenhouse gas emission reduction targets at the United Nations Climate Change Conference currently underway in Egypt, the federal Environment Ministry (Semarnat) said Tuesday.
Semarnat said in a statement that Mexico – Latin America’s second largest greenhouse gas emitter after Brazil – would commit to reducing its emissions by 30% by 2030 “with its own resources.”
The country’s current national determined contribution goal, unchanged since 2016, is to cut emissions by 22% by the final year of this decade.
Semarnat also said that Mexico would lift its conditional emission reduction target to 40% from 36%. Meeting that goal is dependent on external support.
Environment Minister María Luisa Albores González said that the ministry has come up with more than 40 measures to cut Mexico’s emissions. María Luisa González/Twitter
Environment Minister María Luisa Albores González outlined the new commitments Mexico is set to make in a message broadcast online on Tuesday. She said that the Environment Ministry has identified more than 40 measures across all economic sectors to cut emissions.
According to the Semarnat statement, they include “solutions based in nature” including the planting of trees and the creation of more natural protected areas, increasing the use of zero-emissions vehicles, promoting rail transport and remote working and increasing regulation of industry.
The measures – which were also presented during a meeting between President López Obrador and U.S. climate envoy John Kerry in late October – will allow “an estimated total annual reduction” of 88.9 million tonnes of carbon dioxide equivalent by 2030, Semarnat said.
The ministry said that Agustín Ávila Romero, head of the National Institute of Ecology and Climate Change, and Miguel Ángel Zerón, chief of Semarnat’s International Affairs Unit, will attend the U.N. climate conference in Egypt, commonly referred to as COP27.
U.S. climate envoy John Kerry met with President López Obrador in Hermosillo, Sonora, on October 28 ahead of the UN Climate Change conference, which opened in Egypt on November 6. SRE
The Institute of the Americas, an independent, inter-American organization that promotes public-private cooperation across the Americas, noted in a report late last year that Mexico would need to implement additional policies to meet its 2030 target of reducing its greenhouse gas emissions by 22%.
“Mexico’s rollback of support to renewable energy and its response to the pandemic has put the country’s emissions on an upward path. … Emissions will ramp up again as the economy recovers,” the institute said, noting also that Mexico’s was the world’s 12th largest greenhouse gas emitter.
“… The government is now favoring fossil fuels with the construction of a new refinery; a new budget allocation for the modernization of coal, diesel, gas and oil-fueled power plants; and the cancellation of long-term power auctions,” it said.
“Lastly, a recent energy bill effectively halting private renewable energy investments prioritizes the government’s own aging fossil-fuel plants. This reform could force changes in the electricity dispatch order that would significantly increase CO2 emissions.”
The Environment Ministry says Mexico will commit to reducing emissions by 30% with strategies such as tree-planting programs and promoting rail transport, both which could be nods to existing projects like the reforestation program Sembrando Vida and the planned Maya Train. Sembrando Vida/Twitter
At an energy and climate forum hosted by U.S. President Joe Biden earlier this year, López Obrador – an energy nationalist and fossil fuel champion – presented 10 “actions” Mexico is “implementing in the fight against climate change.”
Among the actions he cited were the modernization of 16 hydroelectric plants; Pemex’s investment of US $2 billion to reduce its methane gas emissions by up to 98%; the construction of a 1,000-megawatt solar farm in Puerto Peñasco, Sonora; and the planting of fruit and timber-yielding trees on 1 million hectares of land by means of the Sembrando Vida (Sowing Life) employment/reforestation program.
But Mexico – which was criticized by the Climate Action Network at COP26 in Scotland last year “for pumping more, not less, money into the fossil fuel industry” – is still not seriously committed to tackling climate change, according to some experts.
“It’s highly likely that the Mexican government will try to deceive the entire world at COP27 with false actions and projects that will never be built,” Carlos Flores, a renewable energy expert, told the newspaper The Guardian. “We are not going to meet our current pledges, never mind anything more ambitious,” he said.
“There is no way to look positively at the climate action of an administration that has been focused on undermining renewable energy. In order for Mexico to meet its Paris objectives, we will need a new president in 2024 who can regain the trust of investors and has a real commitment to the environment,” Flores added.
Adrián Fernández, executive director of the activist organization Iniciativa Climática de México (Mexico Climate Initiative), said that energy policy that helps rather than hinders the renewable sector is needed to enable Mexico to achieve its climate commitments.
Ricardo Flores Magón, left, and his brother Enrique Flores Magón at the Los Angeles County Jail in 1917.
One hundred years after the death of the pioneering Mexican revolutionary Ricardo Flores Magón, his story is finding new resonance and visibility in Mexico, thanks in part to Mexican president Andrés Manuel López Obrador’s decision to evoke the revolutionary movement Flores Magón founded, the Magonistas, in the Morena Party’s National Development Plan.
The Morena Party’s explanations of its National Development Plan, its plan to transform the country during AMLO’s term, cites Flores Magón and his historic 1906 revolutionary manifesto for The Mexican Liberal Party as inspiration for its plan for the country. The document influenced Mexico’s constitution of 1917 after the overthrow of notorious Mexican president and dictator Porfirio Díaz, who was eventually overthrown in 1911.
UCLA historian Kelly Lytle Hernández, whose 2022 book about Magón, “Bad Mexicans: Race, Empire & Revolution in the Borderlands,” made The New Yorker magazine’s list of the year’s best so far, says Magón’s history has been relatively forgotten until recently, and certainly outside Mexico it remains forgotten, despite the fact that he greatly influenced his more famous fellow revolutionaries and was even briefly offered the vice-presidency of Mexico.
Although he was an early revolutionary, Flores was self-exiled in the U.S. for much of the active fighting in Mexico, pursuing the overthrow of Díaz from the Mexico-U.S. borderlands. Yet, he was seen as enough of a threat by both the U.S. and the Mexican government that they pursued him together in the years leading up to the Mexican Revolution.
Unlike other revolutionaries of his day, Ricardo Flores Magón dared to call out Porfirio Díaz by name in his writings, which forced him to eventually flee Mexico.
Lytle says she grew up in those borderlands, knowing nothing about Magón and his importance in both Mexico and the U.S., where he became involved in the anarchist movement.
“Across the border, that legacy, that story, has been stopped short for many years. Nobody talked about the Magonistas,” she said. “I felt almost robbed and cheated that no one told me about these people in my own country. They changed the history of the U.S. and Mexico, if not the world.”
Flores Magón launched a series of raids against Díaz from the U.S., which sparked an extraordinary manhunt for him. During U.S. president Theodore Roosevelt’s administration, the Departments of Justice, State, Treasury and War all got involved in the search for him and the Magonistas.
Even the U.S. Postal Service was involved, as was a new agency, which played a leading role – the Bureau of Investigation, the forerunner of the FBI.
“It was possible for [the Postal Service], U.S. government spies and consular officials to open up rebel mail, anticipate the next act of armed resistance and follow [the Magonistas] across the country, arresting, kidnapping and deporting as many as possible,” Hernández said.
Flores Magón’s tale is rooted in the Mexican-American War, when the victorious U.S. annexed about half of historical Mexico in the Treaty of Guadalupe Hidalgo. U.S. Anglo settlers subsequently laid claim to the land, dispossessing Mexican, Mexican-American and indigenous populations. It set a precedent that still remains today: Mexican laborers began migrating seasonally for low-paying, dangerous work on farms and ranches in the American Southwest, subject to segregation that was nicknamed “Juan Crow” – a twist on the racist Jim Crow laws against Black citizens in the American South.
South of the border, military leader Díaz had seized power in 1876 and seemingly achieved his desired goals of order and progress for Mexico following decades of unstable governments dating back to its independence. And yet, as the book indicates, this came at a cost: Díaz monopolized power and stifled dissent; the progress of a modernized economy occurred through favorable deals with international companies and governments, with a heavy U.S. influence. The Mexican public, the book states, suffered from economic dislocation and low wages at the hands of American business owners.
This was the climate into which the Flores Magón brothers – Jesús, Ricardo and Enrique – came of age. A law school dropout, Ricardo started a subversive newspaper named Regeneración and after covering the founding of the dissident political party the Partido Liberal Mexicano (PLM) in 1901, he and his brothers joined and became active members. The group sought not only the overthrow of Díaz but also to take Mexico’s land back to ensure economic freedom for the common people.
Kelly Lytle Hernandez said she was fascinated by the history of this Mexican revolutionary she never learned about growing up on the Mexico-US border.
Unlike other dissidents who were fighting Diaz’s rule, Ricardo called the president by name in his writings. It would be a fateful choice.
Arrest and prison time soon followed. By 1904, the young journalist felt compelled to flee to the U.S. with younger brother Enrique after the Díaz government banned publication of his writings. In the U.S., he reestablished Regeneración and established a U.S. branch of the PLM made up of a diverse group of revolutionaries. The PLM’s Liberal Plan of 1906 contained many ideas later incorporated into Mexico’s 1917 constitution.
“Ricardo Flores Magón was the intellectual leader of the social movement,” Lytle said. “He was among the most radical of the voices.”
What distinguished Flores Magón from other opponents of Díaz was his turn from socialism to anarchism, which appears to have been influenced by his time in the U.S. — and which helped make him a target of the U.S. government as well as the Mexican.
Lytle suggests that other immigrant anarchists who were in the U.S. at this time – notably Emma Goldman – had an influence on him, one that he sometimes downplayed. “It was dangerous in the early 20th-century U.S. to be an immigrant anarchist,” Lytle said. “You could be deported after 1903. Emma Goldman would go on to be deported.”
Flores Magón built up enough support to launch four separate raids against the Díaz regime from Texas between 1906 to 1908. The deadliest one, in June 1908, prompted the involvement of the Bureau of Investigation. “The original intent [of the Bureau of Investigation] was largely [to investigate] land fraud across the American West,” Lytle noted. “Once there was the raid, Roosevelt and the Department of Justice pivoted. They could not ignore it.”
The book also chronicles an increasingly hostile climate on both sides of the border, including the death of a young ranch hand named Antonio Rodríguez in a 1910 lynching by white Texans – a frequent atrocity in the borderlands in that era. Rodríguez’s death sparked extensive anti-American riots in Mexico. When the U.S. government protested the riots, Díaz blamed Flores Magón and a convenient target: the dictator’s rival in that year’s presidential election, Francisco Madero, who had fled northward after a suspicious election loss and was calling for popular revolt against Díaz.
When the revolution finally began in 1910, Flores Magón was initially offered the vice presidency in a Madero administration. However, the Magonista leader alienated Madero — as well as others in the revolutionary movement — with his embrace of anarchy. Madero ended up defeating the Magonistas in Baja California en route to claiming the presidency in 1911.
Kelly Lytle Hernández’s book “Bad Mexicans,” about the history of the Magonistas, was a New Yorker magazine Best Books of 2022.
From the U.S., Flores Magón had to watch other revolutionaries take center stage in the fight to take back Mexico. Still, he had an impact.
One prominent revolutionary, Emiliano Zapata, had been reading Regeneración as early as 1906, says Lytle. Zapata’s famous slogan that he carried on a banner into battle, tierra y libertad (land and liberty), was a Magonista slogan.
So why did Flores Magón’s achievements slide into obscurity? Well, for one thing, he did not live out the rest of his days in Mexico, but rather in U.S. jail at Fort Leavenworth, Kansas, where he died in 1922.
“When I give talks,” Lytle said, “often the first questioner says, ‘It left me in tears. I never had the opportunity to learn this history.’ They did not know why their grandparents came here, their great-grandparents, their parents. They get a better context with their family’s experience in Mexico and the U.S. … The impact has been extraordinary for many readers.”
Rich Tenorio is a frequent contributor to Mexico News Daily.
Revillagigedo national park off the coast of Baja California is known as a "mecca" for scuba divers. SEMARNAT Twitter
Aeroméxico returns to Italy and Japan
Mexico’s flag carrier has announced it will recommence direct Mexico City-Rome and Mexico City-Tokyo flights next March.
Aeroméxico said Monday that it will fly three times per week to Rome starting March 25 and daily to Tokyo commencing the same date. The airline hasn’t flown to the “Eternal City” for 15 years, while it suspended flights to the Japanese capital almost three years ago.
The frequency between Mexico City and Rome will increase to five times per week on June 1, 2023, Aeroméxico said.
The airline also said it will add flights to Madrid from Monterrey and Guadalajara. Flights between both Mexican cities and the Spanish capital will increase from three to five per week on March 27. Daily flights between the destinations will commence June 1.
Volaris flights fail to take off
Budget airline Volaris canceled at least 30 flights to and from the Mexico City International Airport (AICM) on Monday, the news website Latinus reported.
Citing information on the AICM website, Latinus said the airline had canceled 17 outgoing and 13 incoming flights by midday. Among the cancelations were scheduled flights to Cancún, Monterrey, Guadalajara and Tijuana and from Cancún, Puerto Escondido and Acapulco.
Volaris canceled at least 132 flights to and from AICM last week due to what it described as “operational adjustments” precipitated by a reduction in landing and takeoff slots at the airport.
The Federal Civil Aviation Agency (AFAC) recently reduced available slots to 52 per hour at the AICM. The agency declared in March that both terminals had reached saturation point.
AIFA passenger traffic surges
The number of passengers who used the Felipe Ángeles International Airport (AIFA) increased 82% in September compared to the previous month, AFAC data shows. A total of 91,085 passengers used the new airport in September, up from 49,919 in August.
The addition of four new flights in September helped lift passenger numbers at AIFA, located about 50 kilometers north of central Mexico City.
The facility – which was built by the army and opened in March – still has a long way to go to rival the AICM for passenger numbers. More than 3.8 million passengers used the capital’s main airport in September, meaning that the AICM had about 42 passengers for every one person who boarded or disembarked a plane at AIFA.
Mexican destination makes Nat Geo’s “Best of the World” list
Located more than 400 kilometers south of the southern tip of the Baja California peninsula, the national park is North America’s largest fully protected underwater park, the magazine said.
“It offers sanctuary to the continent’s greatest concentration of tropical marine megafauna, from hammerhead sharks to humpback whales, earning it the nickname “the Galápagos of Mexico,” Nat Geo said.
It added that the waters surrounding the four main islands of the Revillagigedo archipelago “are fast becoming a mecca for scuba divers.”
Featuring articles with information about a range of other destinations, Nat Geo’s “Best of the World” hub can be found here.
More new flights
United States low-cost carrier Spirit Airlines last month added new flights to Monterrey from Austin and Houston. Daily flights to the Nuevo León capital from both Texas cities began October 6.
Monterrey is Spirit’s first inland destination in Mexico. The airline also flies from U.S. cities to Los Cabos, Cancún and Puerto Vallarta.
"De donde viene la gente" (Where the People Come From), by Huichol artist Hilaria Chávez, one of artists featured in the Third Biennial of Huichol Art, on display until Nov. 30 at the Presidente Intercontinental Hotel in Mexico City.
The third Biennial of Huichol Art exhibit is now showing at the Presidente Intercontinental Hotel in Mexico City, with a collection of 50 masterworks by some of the most outstanding Huichol artists alive.
Artists showing their work at the hotel in the Polanco neighborhood include Hilaria Chávez, Maximino Renteria and Gregorio Barrio, whose pieces have traveled the world as part of different expositions. Maestro Santos Motopohua, the only Mexican to ever be exhibited at the Louvre Museum, will also have work on display.
In an interview for the website Chilango, Jerónimo Martínez, one of the event’s organizers, said that the exposition “[…] is the most important exhibition of the beads and yarn technique because it highlights a work of popular art in the context of the Huicholes.”
The Huichol people, known in their native tongue as wixárika, are an indigenous group from the central northwest Mexico who have acquired global recognition for their colorful bead and string folk art. Each piece of art features traditional symbols, animals and designs of great spiritual significance to their people.
The curated pieces of this exposition – many of which were created by entire families – tell different stories in the Huichol cosmogony about the first deities that lived on Earth before Father Sun (Tawexika) was born. With the use of an augmented reality tool on a smartphone, visitors will be able to immerse themselves in the spiritual meaning of these pieces and the stories they tell.
Technology will be also present in the form of NFTs (non-fungible tokens). According to Martínez, this will be the first collection of Huichol artwork to be introduced in the NFT market in direct collaboration with the creators of the pieces.
The third Biennial of Huichol Art will remain until Nov. 30 at the hotel, located at Campos Elíseos street, #218. It will later tour the cities of Puebla, Mérida, Cancún and Tulúm before it moves abroad to Germany and Qatar.
The outbreaks of the virus on three poultry farms in Sonora and Nuevo León are just the latest to occur in recent weeks. Graciela López Herrera/Cuartoscuro
Chicken and eggs could be harder to find in parts of Mexico for a while due to an avian influenza outbreak in Sonora and Nuevo León, which could also send prices up for some customers.
Almost 300,000 chickens had to be slaughtered after the bird flu was detected on two farms in the Yaqui Valley near Ciudad Obregón, Sonora, and on one farm in Montemorelos, Nuevo León, according to federal agriculture authorities.
Plutarco Sánchez Patiño, an Agriculture Ministry official in Sonora, said that a total of 296,000 chickens were killed at the two Sonora farms, while agriculture sanitation authority Senasica said that that figure applied to the farms in both Sonora and Nuevo León.
Not all the chickens were infected with avian flu, but they were all destroyed to stop the disease’s outbreak from spreading, Sánchez said.
Avian flu can be found in both wild and farmed birds. Outbreaks at poultry farms often result in large groups of chickens being slaughtered to stop the disease’s spread. Government of Mexico
At the affected farms in Sonora and Nuevo León, Senasica specialists established the “relevant quarantine,” the authority said, adding that the “poultry production units,” or UPAs, were disinfected and depopulated.
The incidents also have made it harder for all farms located in the two states to do business for the time being, due to steps taken by Senasica.
“Due to the findings at the commercial UPAs, Senasica also ordered an internal quarantine in both states, which means that farms located in Sonora and Nuevo León can’t move poultry products that don’t have a permit from the federal health authority,” it said.
“… With the aim of avoiding the spread of the disease and protecting national consumption of poultry products, prior to moving [such products] UPAs must demonstrate via tests carried out at official laboratories that the products are free of [avian flu],” Senasica also said.
According to an Excélsior newspaper report, poultry suppliers and vendors in Sonora, as well as restaurants and rosticerías (rotisseries) have warned that there could be a serious shortage of chicken and eggs in the coming weeks due to the birds’ slaughter. Prices for those products are expected to rise due to the anticipated shortage.
Poultry suppliers said that measures to mitigate the risk of avian flu spreading, including a quarantine, would also contribute to the predicted scarcity.
Governor Alfonso Durazo chaired a meeting of a “special committee against avian influenza” on Saturday and subsequently reported on Twitter that it was a priority of the Sonora government to “comply with strict health controls to guarantee high safety standards in the food industry in our state.”
Alejandro Romero Ayala, an economist, told Excélsior that the anticipated shortage could worsen if avian flu spreads beyond the farms where it was detected. He recalled that some 22.3 million chickens were killed in 2012 after a bird flu outbreak in Jalisco.
Egg prices surged 40% as a result, while chicken prices rose 14%, according to central bank data.
Sonora and Nuevo León aren’t the only states where avian flu has been identified in recent weeks. Senasica said in a statement last Friday that it had detected the disease in birds in seven states, including on a family-run chicken farm in the southern state of Chiapas. Avian flu was also detected in wild birds in Baja California, México state, Aguascalientes and Jalisco, Senasica said.
Senasica said that the entry of bird flu to Mexico via migratory birds was “foreseeable” due to the presence of the disease in the United States and Canada. An animal health emergency protocol known as Dinesa was activated in June, and that has allowed agricultural authorities to respond quickly to avian flu outbreaks, Senasica said.
In October, Mexico's transport and communications sector saw the most growth in formal jobs, at 7.8%. Fotografías con Limón/Unsplash
Formal sector job generation hit the highest increase on record for a single month in October, with 207,968 new jobs, bringing Mexico’s current total of formal jobs in existence to 21.6 million as of Oct. 31.
According to Mexico’s Social Security Institute (IMSS) the October increase represents a 1% growth compared to September and 4% growth compared to October 2021.
A total of nearly 1 million new jobs have been created so far this year, the second-highest total of jobs created between January through October since recording began in 2000, according to IMSS Director Zoé Robledo.
The highest figure for jobs created ever recorded between January and October occurred in 2017, when Mexico created 1.7 million jobs. Of 2022’s current total of 997,178 new formal jobs, 68.4% have been permanent.
Mexico City saw 29,732 jobs created in October, the highest figure for new jobs across Mexico’s 32 states. oscar reygo/unsplash
October’s job creation increase was also well spread out around the country: Sonora was the only state that reported a decrease in the 10th month of the year, with 1,639 jobs lost.
All other entities across the country registered upward progress last month, the highest being Mexico City (29,732 jobs), followed by México state (23,516), Jalisco (23,294), Nuevo León (14,861) and Sinaloa (12,746).
On an annual basis, Tabasco showed the best improvement, with 13.7% growth compared to last October, followed by Quintana Roo at 11.2% and Baja California Sur at 11.1%.
At the other end of the spectrum, the states that registered the least progress in formal employment creation compared to last October were Sinaloa (0.8%), Morelos (1.2%) and Zacatecas, the only state that also showed an annual decrease of -0.2%.
The highest concentration of new jobs occurred in the transport and communications sector, which saw 7.8% growth. The construction sector followed with an improvement of 5.9%, and the business services sector showed an advance of 5%.
In terms of labor income, IMSS said that workers’ average daily salary in October went down by 80 pesos to 479.90 (US $23.99), compared to 480.70 pesos in September. Workers in October on average made 14,397 pesos (US $719.85) per month.
Despite the financial setback, the average daily salary represented an 11.1% increase compared to October 2021, and according to IMSS, the current employment rate is 4.87% higher than it was before the COVID-19 pandemic.
“As of October, in its comparison with the pre-pandemic numbers, 30 of the 32 entities show a complete recovery in employment,” Gabriela Siller, an economist and director at Banco Base, told El Economista. However, she pointed out that compared to employment growth between 2000 and 2019, October’s figure shows a deficit of as many as 650,329 jobs.
The National Institute of Statistics and Geography (INEGI)’s latest citizen poll on employment revealed that the informal market still exceeds the formal: six of every 10 Mexicans have an informal job, meaning that it’s not counted by the government.
However, a bit of good news is that of the 21.6 million Mexicans who have formal employment, 86.4% of them are permanent employees, which is an improvement over the figures at the beginning of the pandemic.
The Bank of México (Banxico) is expected to raise its benchmark interest rate by an additional 75 basis points on Thursday. Deposit Photos
The Mexican peso appreciated for a fifth consecutive day on Monday to close at its strongest level against the U.S. dollar since 2020.
Buoyed by the expectation that the Bank of México (Banxico) will raise its benchmark interest rate by an additional 75 basis points on Thursday, the peso was selling at just under 19.45 to the dollar at the close of trading on Monday.
Banxico data shows that the exchange rate was the strongest end-of-day position for the Mexican currency since March 2020, when the cost of a greenback dipped below 19.4 pesos.
The peso appreciated 0.36% on Monday, increasing its gains over the past five trading days to 1.82%. It had weakened slightly to about 19.5 to the dollar at 9 a.m. Central Time on Tuesday.
Gabriela Siller, director of economic analysis at Banco Base, said that the current strength of the peso is related to the expectation that the Bank of México will once again follow the lead of the U.S. Federal Reserve and raise its key rate by 0.75%.
Banxico holds its monetary policy meetings the week after the Fed makes its rates announcements, and appears likely to match the U.S. central bank’s 0.75% hikes for a fourth consecutive time this Thursday as inflation – 8.5% in the first half of October – remains well above its target rate. The official interest rate in Mexico would thus reach 10%, more than double the 3.75-4% range in the U.S.
Siller said that another factor contributing to the peso’s strength is that significant amounts of money are flowing into Mexico in the form of payments for Mexican exports, remittances and foreign direct investment.
In addition, “the dollar has weakened a little” because the Fed is nearing the end of its tightening cycle, she said.
“Few interest rate increases remain, and even though there continues to be a restrictive monetary policy [in the U.S. for now], the light at the end of the tunnel is now visible,” Siller said.
The analyst said that the peso could strengthen further if Banxico lifts rates by more than the predicted 0.75% this Thursday, or if it indicates in its monetary policy statement that it will continue along an aggressive tightening path. Such a scenario could see the peso strengthen to 19.2 to the dollar, Siller said.
Looking further into the future, the deputy director of economic analysis at the brokerage house Vector said that the Fed is likely to start cutting rates before Banxico, and such a situation would benefit the peso.
“It’s becoming increasingly clear to the market that when we reach the interest rate peak in Mexico and the United States, it’s very probable that the United States will think about lowering … [rates] before Mexico. … That issue … helps the exchange rate [here],” Luis Adrián Muñiz said.
Muñiz, Siller and Monex analyst Janneth Quiroz – all of whom were cited in an El Economista newspaper report – agreed that the peso could also benefit from an additional decrease in the inflation rate in the United States. If data to be published this Thursday shows that the annual rate in the U.S has declined for a fourth consecutive month, the dollar will weaken, giving the peso more scope to appreciate, they said.
The British bank Barclays offered a rosy forecast for the peso late last month, saying that it could appreciate to 19 to the U.S. dollar by the end of next year. In contrast, Moody’s Analytics said earlier in October that the peso could depreciate 20% against the U.S. dollar in the coming months due to tightening monetary policy in the United States.
The peso has been one of the best performing currencies in 2022, gaining over 5% against the dollar at a time when many other currencies have lost ground against the greenback, which is seen as a safe-haven currency in times of economic uncertainty.
Workers at EDISSustentable in Ixtapa-Zihuatanejo, Guerrero, install solar panels at a customer site.
In 2017, when Cubans Rodelaine Martínez Torres and his wife Virginia Campos discovered Zihuatanejo, they liked it so much that they decided to stay.
With a background in engineering and solar experience at a thermal electric plant at Pinar del Rio in Cuba, Martinez quickly saw the potential to start his own solar panel company in the resort area, where according to Google, the sun shines on average 340 days a year.
Today EDISSustentable, which sells panels, generators and hybrid systems, has more than 100 customers, including the International Ixtapa-Zihuatanejo airport, their largest project to date.
Martínez and Campos also give back to the community. It brings programs to schools to educate kids about renewable energy, and it also has a paid internship program that hires students from the nearby Technological University of Costa Grande in Petatlán, a win-win situation for both sides: students get long-term hands-on training, and the company benefits from training students who become a skilled local labor pool it can hire from.
Rodelaine Martínez Torres, owner of EDISSustentable solar panel company in Zihuatanejo, is originally from Cuba and fell in love with the resort city so much, he changed from a tourist to a resident.
César Eduardo Martínez Najera, a graduate of the program, who worked 190 hours as an intern at the company and eventually became an employee, had nothing but good things to say about his experience.
“This aspect had me very excited, as at the university, the theory was 30% and 70% was in practice.”
When solar power got going in Mexico around 2015, according to Martínez, Mexico’s federal government first began supporting the industry’s development with simplified permitting procedures for 500-kilowatt- to 2-megawatt projects. There are also several subsidies available for those who buy solar systems, including a 100% tax incentive.
However, the current Mexican government is not as open to renewable energy as it used to be, Jeremy Martin of the Institute of the Americas, a think-tank based at the University of California San Diego, recently told the financial magazine Forbes.
Installers install panels at Ixtapa-Zihuatanejo Airport, EDISSustentable’s largest client to date. Some of the company’s workers are graduates from a paid solar industry internship program the company runs.
“Overall, [President] López Obrador is prioritizing fossil fuels at the expense of renewable energy and has disparaged wind turbines for polluting the visual landscape in rural areas,” he said. “Globally, the energy trend lines are clear. Net-zero and climate actions are the imperatives driving the world’s policy choices and regulations.”
But for many potential solar customers, the bottom line isn’t how much federal support there is but how much savings they can get on their electric bill. And what can stop people from progressing from consideration to execution is not knowing how such systems work, how to judge a solar panel system’s usefulness or how to evaluate the company promising to install it.
Martínez explains that a consultant should visit your home or property to ascertain the roof’s slope, the house’s size, electrical units and appliances. Then, they check your electric bills to see your current consumption to determine how substantial your savings would be. Next, a converter is attached to a charge center system on a separate meter, which measures what your panels produce and consume.
A phone application can track all this for you.
Solar energy is becoming more accepted in Mexico’s daily life, as this huge solar array in progress on Mexico City’s municipal public market, the Central de Abastos, shows.
The sun’s light and the amount of sunshine make the panels more effective; an average of 28 degrees Celsius temperature is ideal. Once the light hits, it passes through a microinverter connecting four panels simultaneously. If something interferes with one of the panels functioning — such as dirt dropped from a passing bird — the other panels continue to work. Getting the panel to work again is simply a matter of hosing off the boards with water, something homeowners typically need to do once a month.
The normal life expectancy of panels is 25 years.
And how long does it take for solar panels to pay for themselves? EDISSustentable’s customer service representative Marianna Best says that you can normally expect a return on investment within three to four years. “As soon as the panels are installed and the meter is changed, customers can expect a 98% decrease in current electrical bills.”
But, she cautions, “It is important to ensure you are dealing with a reputable company. Things to watch for are whether the engineers are qualified and certified. In addition, you need to check that the panels, the microinverters, and the materials are of the quality that the company says they are. Consumer reports and reviews help.”
To learn more about EDISSustentable, you can contact them through their website.
The writer divides her time between Canada and Zihuatanejo.
Ichkabal was rediscovered by researchers in 1994. INAH
On route to the Bacalar lagoon in Mexico’s Yucatán Peninsula, the site of the ancient Maya city of Ichkabal (City of Snakes) will soon open to visitors, according to Diego Prieto Hernández, Director of the National Institute of Anthropology and History (INAH).
Although there is no confirmed date for its opening, researchers and authorities hope that the first tangible results of work on the project will be seen by tourists by mid-2023.
“Ichkabal is not open to the public because it is not easy to access the area,” Prieto said at a press conference.
With a large portion of the city still lying beneath the jungle, the site is currently being excavated by the National Institute of Archaeology and History (INAH) as part of the Program for the Improvement of Archeological Sites (Promeza), an initiative to improve and/or develop archaeological sites along the route of the under-construction Maya Train, a commuter and tourist railroad route that will have stops near many tourist cities and attractions in southern Mexico.
Ichkabal is located near Bacalar, Quintana Roo, a quiet municipality that federal and state officials believe is ripe for more tourism. Cuartoscuro
Located 30 kilometers away from what would be the Bacalar station of the railway project, Ichkabal was only discovered 28 years ago by archeologists Enrique Nalda Hernández and Javier López Camacho, although there had been talk of an archaeological site in the region since the 1930s.
So far, excavation at Ichkabal has revealed a central set of five buildings that are at least 2,400 years old. Standing out among them is a 40-meter-high pyramid twice the size of the large Kukulkán temple in Chichén Itzá. The Ichkabal pyramid has a base area similar to that of the Pyramid of the Sun in Teotihuacán.
The building’s size supports the findings of previous investigations of the site, which have suggested the importance of Ichkabal for the Maya. Some researchers believe the city is the origin of the Kaanu’l (serpent) dynasty, one of the most powerful ruler groups of the Maya civilization.
Ichkabal has been a site Quintana Roo has wished to develop for years. In 2016, the federal government via INAH agreed to invest more than 11 million pesos in preparing the site for tourism. Sedetur
Archeological findings at the site ranging from between the Pre-Classic period and the Maya civilization’s collapse (400 B.C.–A.D. 900) demonstrate the city’s permanence through time, also an indicator of the site’s importance.
The artificial lagoons used as water reservoirs for the ancient city have also surprised archaeologists. In an interview with the newspaper La Jornada, INAH archeologist Sandra Balanzario said that the lagoons used an advanced hydraulic technique to avoid erosion and water seepage, allowing the lagoons to support the daily life of a city of 100,000 inhabitants spread over an area of 60 square kilometers.
To date, 26 archaeological zones along the Mayan Train are currently undergoing renovation work, with Quintana Roo being home to the largest number of zones in the program.
