Long Lines in San Ysidro to Exchange Money : Peso Sinks to 306 to the Dollar

Mexicans and Americans alike queued up at currency exchange houses in this border community Wednesday seeking the best price for their pesos, which were trading at all-time lows despite no official word of a devaluation by the Mexican government.

Mexican banks were selling U.S. dollars only to account holders, forcing other Mexican citizens to buy dollars from a strip of about two dozen exchange houses in the San Diego protectorate of San Ysidro, about 20 miles south of downtown San Diego.

The exchange rate of pesos to a dollar topped 300 to 1 for the first time Tuesday afternoon and continued to rise Wednesday. At midday, a dollar would buy 306 pesos, and 310 pesos were needed to buy a dollar.

Exchange-house operators said small savers of pesos were dumping the currency in favor of dollars, apparently from fear that the peso would lose more value compared to the dollar by the end of the week.

“The Mexican banks’ regular customers are not able to buy dollars, so the only thing for them to do is come here,” said Adrian Waumann, an official of Valuta, the largest wholesale exchange house in San Ysidro.

She said Valuta has plenty of U.S. dollars and is placing no limit on the number of pesos accepted from a single customer.

Hector Acuna, a teacher at Institute of Technology in Tijuana, said he purchased only the dollars he needed for shopping in the United States.

“This is an indicator for the economy of Mexico, and it is not good,” he said. “Rather than seeing 320 to 1, I think the Mexican government should say what is happening. I am worried, but not too much. This has been going on for a long time.”

The official devaluation of the peso is proceeding at 21 Mexican centavos a day, far slower than the current trading rate, which has seen the peso fall from 253 to 1 on May 25 to 306 to 1 on Wednesday.

The fluctuation is helping Americans doing business in Mexico, especially tourists traveling across the border to Tijuana.

“The value of their dollars is higher,” Waumann said. “But most of the shops down there are raising the price of everything.”

Enrique Esquer, a Chula Vista resident, bought pesos with his dollars Wednesday, explaining that he purchased a condominium in Tijuana and needed to make his mortgage payment in the Mexican currency.

If he paid in dollars, he said, he would receive an exchange rate of 245 pesos for each. By exchanging the money at a U.S. exchange house, he received 305 pesos for each dollar.