The exchange rate reached 21.6140 pesos per dollar on Wednesday morning, threatening a prospect of approaching 22 pesos per dollar before the end of the year.
According to Banco de México (Banxico), the benchmark closing was 21.4472 pesos per dollar, a depreciation of 21.97 cents or 1.03% compared to the 21.2275 units per greenback on Tuesday.
At 8:30 in the morning, Mexico City time, the exchange rate reached a maximum of 21.6140 pesos per dollar, which registered a depreciation of 1.82% or 38.65 cents compared to the closing of Banxico the previous day, for moderate your price during the afternoon.
Carlos Hernández, senior analyst at Masari Casa de Bolsa, commented that “there are two factors that are generating movements for the exchange rate. One has to do with the general strength of the dollar, which has had the greatest weighting factor; while the internal factor is a new evaluation process of the future of monetary policy that Victoria Rodríguez would be implementing ”.
President Andrés Manuel López Obrador announced that he will propose the Undersecretary of Expenditures of the Ministry of Finance and Public Credit, Victoria Rodríguez Ceja, to lead Banxico from 2022.
On Tuesday, Arturo Herrera, former nominee for the governorship of Banxico, confirmed through his social networks that: “the president informed me a week ago that he had decided to reconsider my appointment as head of the Bank of Mexico.”
That day, at 8:00 p.m., the peso reached 21.2665 units per dollar after closing that Tuesday at 20.2275.
Gabriela Siller, Director of Economic Analysis at Banco Base, said that “the announcement was a surprise for the market, generating uncertainty about the central bank’s monetary policy expectations. In the short term, it will be key to know his position on inflationary pressures and if he considers that they are temporary or not, since his vote in the Governing Board will depend on this, if confirmed “.
With the new candidate to head Banxico, the market will be attentive to “the direction that monetary policy will take with respect to the evolution of inflation,” said Carlos Hernández.
“The overall outlook for the tone of monetary policy should remain hawkish through 2022, therefore attention will be paid to the alignment it develops,” he explained.
The dollar index, which measures that currency against a basket of six reference currencies, gained 0.39% on Wednesday reaching 96.86 points. With a maximum of 96.94 points, it hit its highest level since July 2020.
“The strength of the dollar is due to three elements: the strength of economic activity in the United States, the beginning of tapering and the prospect of accelerating cuts in monetary liquidity,” said the Masari specialist.
Gabriela Siller said that “the exchange rate is very close to the maximum level for the year and opens the possibility of reaching prices close to 22 pesos before the end of the year. The Mexican peso is the second most depreciated currency of the day ”. (With information from José Antonio Rivera)
Reference-www.eleconomista.com.mx