Mexican Peso Weakens for 3rd Straight Day vs. Dollar
The Mexican currency fell past 600 pesos to the dollar Thursday in the third straight day of a marked deterioration of its value.
Prevailing rates on the free market were 635 pesos for those wanting to sell dollars and 640 to buy one.
The rates were up sharply from Wednesday’s quotes of 585 and 595. The peso briefly slipped past the 600 mark Wednesday morning at some exchange houses before strengthening later in the day. It was the first time that the peso’s value had weakened to that level.
The free-market rate is used in tourism and for most border and private transactions.
A second rate, set daily by the central Bank of Mexico and representatives of commercial banks, was about 543 on Thursday. The rate is used in about 80% of the nation’s commercial transactions.
It was unclear what forces were driving the latest deterioration in the peso’s value.
Local newspapers have repeatedly reported that the government is set to put in place a series of strong economic measures to reduce interest rates, freeze wages and prices and create a new currency.
Government officials have denied the existence of any such plan, which has been dubbed in the press the Aztec Plan.
There also have been reports of growing concern about the nation’s ability to stay current on its foreign debt of nearly $100 billion.
Gloomy economic news often triggers a rush by investors to change their weak currency into a stronger one such as the U.S. dollar.
The peso has weakened sharply in recent years. It was 445 to the dollar at the start of 1986.