President Andrés Manuel López Obrador is likely to use the appreciation of the peso against the dollar as one more propaganda tool of the many that he uses all the time to lead his movement from his position as chief executive.
But it is also possible that the Q4 leader really believes that the market is endorsing him with those peso-dollar parity levels below 20.
The risk of the National Palace thinking that this currency appreciation is a kind of standing ovation from market participants for their public policies is that they do not reflect on the urgent need for moderation that this regime should have.
Because one thing is the resilience of the economic agents and the speed of escape that financial capital can have when the political, economic and financial situation really gets complicated, and quite another is that there is no full understanding that, before In the eyes of investors, both domestic and foreign, Mexico is today a country with a higher risk.
There is an abuse of the little information available to many of the faithful followers of the 4T when López Obrador presumes in the mornings the appreciation of the peso and the increase in remittances sent by Mexicans, basically from the United States.
There are millions of Mexicans who have had to leave their country and millions more who are in the process of trying because in their places of origin, along with their families, they do not have opportunities for economic development or because violence has literally made them escape. with what they are wearing.
And in the case of the strength of the Mexican currency, there is not a single internal factor that leads to a universal feeling of wanting to own Mexican pesos as a response to the public policies of the current regime. On the contrary, the López Obrador administration has at times generated the sale of assets in national currency.
The peso has regained strength today for a structural reason of the monetary policy of the United States.
General inflation in that country is around 8% in annual terms and its interest rate remains at 0.25 percent. This implies that keeping dollars invested in fixed income instruments guarantees a loss in real terms.
On the contrary, buying Mexican pesos implies having a return of at least 6.5%, which is the current overnight interbank rate.
The moment the Federal Reserve reaches higher interest rate levels and inflation shows a sustained downward trend, those flows will change and the peso will then depreciate.
To the extent that Russia stagnates in its invasion and has to negotiate with Ukraine, the desire of capital to fly to quality decreases and the peso appreciates. If a military accident occurs in Eastern Europe, the peso depreciates.
In short, any combination that we want to see to explain the strength of the peso comes from the outside.
Televisa News Anchor
The great Depression
Bachelor of Communication Sciences from the National Autonomous University of Mexico, with a specialty in finance from the Autonomous Technological Institute of Mexico and a master’s degree in Journalism from the Anahuac University.
His professional career has been dedicated to different media. He is currently a columnist for the newspaper El Economista and news anchor on Televisa. He is the owner of the 2 pm news space on Foro TV.
He is a specialist in economic-financial issues with more than 25 years of experience as a commentator and host on radio and television. He has been part of companies such as Radio Programas de México, where he participated in VIP business radio. He was also part of the management and talent team of Radio Formula.