The dollar fell to pre-pandemic levels; At its lowest level in more than two years

The dollar exchange rate Against the peso it is at its lowest level in more than two years, returning to previous levels of pandemic. The revaluation of the peso is attributed, among other factors, to increased incomes foreign investment in the country.

in wholesale markets, US currency It is being offered at 19.55 pesos, its lowest since March 4, 2020, before non-strategic activities were suspended due to the pandemic, according to Investing.com data.

“The day before, March 3, 2020, the peso was priced at 19.2837 pesos. In 2020, the lowest exchange rate was reached on February 14 at 18.57 pesos to the dollar, a level that is practically impossible to reach this year.” Gabriella CellerDirector of Economic Analysis for Base Financial Group on his Twitter account.

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Retail dollars are sold in bank windows for 20 pesos, also the lowest level in the past two years and about two months, according to prices published by CitiBanamex.

The specialist considers that the consequences of revaluation of the peso are: 1) less pressure on inflation, 2) a stimulus to capital inflows and 3) a disincentive to exports. When the peso goes up, the dollar yield goes up, which is an incentive to enter foreign portfolio investments.

“The incentive is generated from the expectation of more appreciation. If its value is expected to decrease, there will be a disincentive, as fewer instruments are bought with the same dollars, plus the expected return will be lower due to the potential appreciation in the exchange rate,” explained Seller Through social media network.

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So far this year, the Mexican currency could have gained 5.12% against the dollar, the fifth highest-yielding currency among the seven currencies that recorded gains in the reference period.

The current exchange rate levels open the possibility of reaching 19 pesos this year if these factors are met: 1) global risk aversion decreases, 2) dollar weakness, 3) an equal or greater difference in rate with United State 4) An increase in dollar flows from remittances and exports, according to the specialist’s estimation.

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