The Mexican currency closed the year with a record appreciation against the dollar of almost 13%, making it one of the best performing emerging currencies, a phenomenon that specialists attribute, in part, to the phenomenon of chain relocation or 'nearshoring'.

The Mexican peso ended this last day at 16.96 units per US note, a valuation of 12.89% compared to the price of 19.47 on the first business day of the year, January 2, according to the official closing data of the Bank of Mexico (Banxico).

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This is “the largest annual appreciation on record since we had a free floating exchange rate regime,” highlighted Gabriela Siller, director of economic analysis at Banco Base, in a report shared with the media.

With this, the Mexican currency “is set to close 2023 as the second most appreciated currency in the broad basket of main crosses, only behind the Colombian peso,” added Jesús Anacarsis López, analyst at the same institution. This year's rise in the Mexican peso is almost double its previous record, 7.7% in 2012.

Analysts agree that one of the main factors behind the rise of the Mexican currency is 'nearshoring', a phenomenon that boosted foreign direct investment (FDI), which set a record of almost 33 billion dollars in the first three quarters of the year. , a year-on-year increase of 30%.

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The appreciation of the peso also occurred due to dollar flows from exports, which grew 2.9% year-on-year to 543,762 million dollars in the first 11 months of the year, according to data from the National Institute of Statistics and Geography (Inegi).

And also due to the record of remittances received by Mexico, where they reached 52,888 million dollars in the first 10 months of the year, a year-on-year increase of 9.4%, according to Banxico figures.

Finally, analysts highlighted the differential in interest rates between Mexico, where the central bank maintains it at a record of 11.25%, and the United States, where the Federal Reserve (Fed) placed it in the range of 5.25% to 5.5 %.

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Original note