The retail dollar reaches an all-time high, as it sells for 24.29 pesos at bank windows, just over a peso above Tuesday’s close, pressured by the uncertainty generated by the economic impact of the pandemic by the coronavirus.
The wholesale exchange rate reached a record high, selling at around 24.00 pesos per dollar, one peso above Tuesday’s close, also reaching a record high, after it had been offered at yesterday’s session at 22.94 pesos.
The depreciation of the Mexican currency is related to the increasing perception of risk that exists among investors who demand dollars to hedge and invest in refuge instruments such as United States Treasury bonds whose yield tends to decline due to the increasing demand.
Stock markets show negative movements, despite the economic efforts implemented by the United States and other countries.
The investors’ focus is the economic deterioration caused by the coronavirus, added to the previous scenario of a global economic slowdown.
Another aspect of concern is the economic measures (in addition to various industries), which could be insufficient, or in advance before possible weak figures in the medium term. Globally, infections persist, in addition to flight and contact restrictions between nations.
However, the parity reached a new historical maximum of 24.11 pesos, which means a depreciation of 30 percent for the Mexican currency.
Most currencies show losses against the dollar, although the Mexican peso is the most depreciated currency. Gabriela Siller, director of Economic-Financial Analysis at Banco Base, attributed the drop in the peso to factors such as the drop in oil prices.
Texas Oil (WTI) is down 8.4 percent and hits a new low of $ 23.60 a barrel, something that hasn’t happened since November 2002.
Oil prices have fallen on signs that the global economy will be severely affected as a result of the coronavirus pandemic, at the same time that oil supply is increasing globally.
The movement in the price of crude oil implies that the price of the Mexican mix could be below $ 18.78 per barrel registered on Tuesday. The lower price increases the risk of a cut to Pemex’s credit rating and the country’s sovereign debt, warns Gabriela Siller.
Source: banxico, notimex
The Mazatlan Post
