The exchange rate ended this Thursday at 20.2057 pesos per dollar, which meant a depreciation of the Mexican peso of 0.95% or 18.94 cents, its second worst session of the week, due to statements about a more aggressive monetary policy of the Federal Reserve from the United States.
Jerome Powell, president of the Fed, said that an increase of half a percentage point in the reference interest rate of that country will be on the table when the Committee meets on May 3 and 4.
The official said that although he preferred not to elaborate on his projection on the future evolution of rates in the United States, he was convinced that the main objective of the US central bank was to curb inflation and get it back to the 2 percent target.
During the operations of the electronic market, the Mexican currency reached a level of 20.2345 pesos per dollar at noon, to end at 20.2057 units per dollar at the close of the Bank of Mexico, and until 7 at night, Mexico City time. , the exchange rate operated at 20.1840 pesos per dollar.
According to the central bank quotes, the local currency returned to the levels of March 22, prior to the start of Russia’s invasion of Ukraine, when it was quoted at 20.2786 pesos per dollar.
Gabriela Siller, director of economic analysis at Banco Base, commented that “a stronger dollar cannot be ruled out, since just this week the president of the St. Louis Fed, James Bullard, indicated that it might be necessary to consider increases in the rate up to 75 basis points. Although the market does not anticipate movements of this magnitude, if greater inflationary pressures are observed in the following months, there could be an increase in speculation about the future of monetary policy and upward pressure on the exchange rate.
In fact, on the day, the dollar index, which measures the strength of the US currency against a basket of six reference currencies, had an increase of 0.24% to a level of 100.63 points, with which it accumulates six days above of 100 units, its highest level since May 2020, during the Covid-19 pandemic.
The comments of the Fed were added to the fact that Victoria Rodríguez Ceja, governor of Banco de México, appeared this Thursday before the Treasury and Public Credit Commission of the Senate of the Republic to speak about the fulfillment of the mandate of the Central Institute to maintain the price stability and ensure that inflation converges towards the 3 percent target. She said that Banxico will act in a timely manner to ensure that inflation converges towards its goal.