{"id":10534,"date":"2015-07-30T06:16:17","date_gmt":"2015-07-30T11:16:17","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10534"},"modified":"2015-07-30T06:16:17","modified_gmt":"2015-07-30T11:16:17","slug":"mexican-peso-dives-fretting-begins-about-peso-crisis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10534","title":{"rendered":"Mexican Peso Dives, Fretting Begins About Peso Crisis"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/07\/29\/mexico-next-peso-crisis\/\" target=\"_blank\">Mexican Peso Dives, Fretting Begins About Peso Crisis<\/a><\/h3>\n<p><span class=\"Apple-style-span\"><strong>\u201cEveryone got used to playing with free, easy money. Now it\u2019s going to cost us.\u201d<\/strong><\/span><\/p>\n<p>On July 1, the Financial Times wondered\u00a0<a href=\"http:\/\/www.ft.com\/intl\/fastft\/353631\/mexican-peso-how-low-can-it-go\">just how low the Mexican peso could go<\/a>, likening the ill-fated currency to a limbo dance: \u201cEvery month, it gets just that little bit lower.\u201d<\/p>\n<p>In the\u00a020 trading\u00a0days since, the peso has experienced eight record daily lows, in itself a record, even for Mexico. Not since the peso-dollar floating exchange rate system was established, on December 21, 1994, at the height of Mexico\u2019s Tequila Crisis, has the currency notched up so many new lows in one single month. And there are still three days left to go!<\/p>\n<p>At 16.25 pesos to the dollar currently, the peso\u00a0has lost roughly 20% of its value against the dollar\u00a0within a year. In December last year, with the exchange rate dropping to\u00a014\u00a0pesos to the\u00a0dollar, the country\u2019s Exchange Rate Commission launched a currency intervention program in a bid to prop up the peso, or at least stymie its slide.<\/p>\n<p>Like so many central bank interventions these days, it failed: by March, it took 15 pesos to buy\u00a0a dollar. The Commission upped the ante, announcing it would conduct daily auctions of $52 million, without setting a minimum price requirement. That was four months ago. Since then, the peso\u2019s value has continued to slide\u00a0against the dollar, and the pain is beginning to show.<\/p>\n<p>As\u00a0<em><a href=\"http:\/\/www.elfinanciero.com.mx\/economia\/depreciacion-del-peso-impacta-a-la-industria-local.html\">El Financiero<\/a><\/em>\u00a0reports, although inflation, at around 3% , remains at historically low levels, pressures are beginning to rise. Some imported goods, including medical appliances, plastics and petrochemicals have registered price increases of between 10% and 15% over the last couple of months. With external trade accounting for 63% of the national economy, the impact is unavoidable. Particularly hard hit are companies with heavy debt loads denominated in dollars.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mexican Peso Dives, Fretting Begins About Peso Crisis \u201cEveryone got used to playing with free, easy money. Now it\u2019s going to cost us.\u201d On July 1, the Financial Times wondered\u00a0just how low the Mexican peso could go, likening the ill-fated currency to a limbo dance: \u201cEvery month, it gets just that little bit lower.\u201d In [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[122,7659,951,195,5660,6306,7656,517,7657,7658,839,4255],"class_list":["post-10534","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-bank","tag-central-bank-intervention","tag-currency","tag-debt","tag-don-quijones","tag-exchange-rate","tag-mexican-peso","tag-mexico","tag-peso","tag-peso-crisis","tag-us-dollar","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10534"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10534\/revisions"}],"predecessor-version":[{"id":10535,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10534\/revisions\/10535"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}